The Letter You DON'T Want!

Posted by Matt Simon on Oct 17, 2010

Have you ever heard the expression "insurance is like a parachute... if it isn't there the first time, chances are you won't be needing it again"?  If you were jumping out of a plane tomorrow, wouldn't you be checking, double-checking and triple-checking your parachute?  When was the last time you did a check-up on your insurance protection?  After a loss occurs is a terrible time to discover your coverage was inadequate.

Unfortunately, far too many people don't realize the importance their insurance protection plays in their daily lives.  Can you imagine losing your house?  Your assets?  50% of your current and future income?  It can, and does, happen.

Below is an actual letter mailed from an insurance company located in California to one of its insureds (the names have been changed or omitted to protect those involved in this claim).

Dear James,

As you are aware, we have been investigating and handling those claims presented against you as a result of the above referenced incident.

I am writing to inform you that our investigation has revealed that those claims being presented have a potential value which may exceed your policy limits of $250,000 per claim under your auto policy.  "The Insurance Company" is not obligated to pay any amounts which exceed your policy limits.  You may wish to consult legal counsel, at your own expense, to advise you on this issue.

I assure you that we will continue to make every effort to protect your interest in this matter, and to attempt to settle this claim within your policy limits.  In this regard, please be advised that we recently received a phone call from the hospital treating Teresa Gibson, who was rear ended by your son.  They have indicated that her medical bills exceed $700,000.

Should you have any further questions, please do not hesitate to contact Dave Jones at the above listed number.

In this situation, there's little that can be done other than to hope for the best.  It's too late to increase limits of coverage for this claim.

Are you wondering, "what could have been done to avoid this situation?"

Well accidents are a part of life.  Sure, if you don't talk on the phone or drive at excessive rates of speed, you can reduce your chances of having an accident but nothing eliminates this risk entirely.  Which is why it's critically important to be prepared if and when that accident does occur.

That's where we can help.  You have numerous options from increasing your liability limits to adding an umbrella policy to help protect in the situation described above.

All of us here at H&H want to make sure you and your loved ones never find yourself in this situation or something similar.  Take advantage of the more than 100 years of combined experience our licensed advisors have in everything from home, auto and life insurance to protection for your business. 

You probably wouldn't wait until you already jumped out of a plane to consider your parachute, so don't wait until an accident occurs to review your insurance.  Failure to properly plan could result in catastrophe in both situations!

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