If you take a close look at your Citizens home insurance policy, you’ll notice that your personal liability coverage has dropped from $300,000 to $100,000 in your renewal contract.as of May 1, 2012. Personal liability insurance might be one of those policies we don’t give much thought to because we don’t think we’ll ever need it. But, if you do ever find yourself needing to make a claim or pay a judgment, the reduction in coverage could cost you big time.
Aside from the obvious reduction of $200,000 in personal liability coverage, this change also has costly implications if you have an umbrella insurance policy. Umbrella insurance policies cover damage in excess of what your homeowners insurance covers and kick in after you exhaust the coverage on your homeowners policy. Though your primary and auto policies pay for the majority of your claims, umbrella policies cover you in the event you are held liable for injuries or other accidents on your property or involving your vehicle.
Most umbrella policies in Florida require you to have $250,000 to $300,000 in personal liability coverage on your homeowners policy before the umbrella coverage kicks in. So you’d either have to make up the $200,000 difference on your own before your umbrella policy paid any money out, or you’d have to get gap insurance. Your agent might also suggest moving the “non-hurricane portion” of your homeowners insurance to another carrier.
It’s important to stay on top of changes in your homeowners policy, whether you have Citizens or another carrier because you may not realize you’re not as covered as you thought until it’s too late. Ask your agent about liability coverage changes each time you renew your policy – or any time! – to make sure that you will be able to get the payout you need, when you need it.