Be sure to check out the Comments section below for other examples….


The first incident is something I read online at Reddit where consumers often ask insurance questions:

“I have an auto insurance policy with AMICA. However, in April of this year, i reduced coverage, as I was not driving the vehicle at all. My vehicle was marked as not being driven, which I believe means I don’t have liability coverage.

“As fate may have it, I decide to drive for the first time in 3 months to a grocery store hardly a mile away, stop at a traffic light and proceed to accelerate as a green light is on. The vehicle in front of me stops abruptly and I had hardly any time to react and I hit the car in front of me on the bumper. There was no damage to my car and the other car had probably a bumper scratch. No visible damages to both cars. Cop gets called in and a police report is filed. We both state there’s no damage to car and no one is injured and I get home. I also call up insurance to put back my liability and all others back on the policy.

“Today 3 days later, the other party files for injury claim. I get a call from my insurance company today asking the details and I provided them. I am wondering as to how will this be handled by insurance, as I may not have liability insurance at the time of the incident. Will there by any out of pocket expense?”

This is exactly why I’ve written before about suspending auto coverage:

Hopefully, in his case, he only suspended physical damage coverage, as some states may not allow liability coverage to be suspended while the license is active. Sadly, he doesn’t even know what coverage was suspended and may, in fact, have simply cancelled his coverage.

The second incident was a marina fire. I live on a lake across a cove from a marina. In 2013, a tornado came through our property on its way to destroying much of the marina. This time, according to at least one account, a houseboat owner was working on the engine in his slip, starting and stopping it many times throughout the day, and perhaps gas fumes built up until there was an explosion and fire. Fortunately, no one was injured.

According to news accounts, three houseboats and a pontoon boat were completely destroyed, along with damage to other watercraft, not to mention significant structural damage to the docks. This is purely a guesstimate, but I would not be surprised to learn that the damages exceed a million dollars. I’m also guessing that the person responsible had watercraft liability insurance but I wonder about the limit and whether he has an umbrella policy.

People with watercraft need umbrella policies. REAL umbrella policies. GOOD umbrella policies. And probably not just $1M limits, depending on both the assets and income (now and in the future) of the insured and the exposure to loss.

When we got our pontoon boat in 2013, I added watercraft coverage to our personal lines account and our $2M personal umbrella policy. The cost to extend the umbrella liability to the boat? Seven dollars. Yes, you read that correctly, SEVEN ($7.00) dollars. What watercraft owner can’t afford an additional $7 premium on an umbrella policy?

Do you share stories like this with your customers and prospects? Do you have success stories where you, with great effort, convinced someone to buy a coverage or policy they didn’t think they needed until they did? Stories and testimonials are one of the best sales tools you have.

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Bill Wilson

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One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information