Excess liability coverage plays an important role in risk management planning because it contributes to protections that surpass standard liability policies. Unfortunately, some misconceptions surround excess liability that can keep homeowners from seeking the coverage they need.
In this blog, we address some of the most common misconceptions of excess liability coverage in community associations so that insurance agents like you can offer accurate information and customized solutions for your clients. Understanding these misconceptions empowers you to guide community associations toward the proper coverage for their needs.
Myth 1: Primary Liability Coverage Is Sufficient
Many community associations wrongfully assume that their standard liability coverage protects them against all possible liability risks. Although those policies do offer some protections, their limitations may prevent full coverage of potential claims. When your community association clients understand these limitations, they can better appreciate the value of excess liability coverage to protect against claims exceeding their standard coverage.
Excess liability coverage can save the association’s assets and future operations when it faces a significant liability claim. As an agent, you should inform your community associations about the risks associated with insufficient liability coverage and claims that can exceed standard policies, including severe injuries, property damage, and costly legal fees. Then, emphasize the importance of adequate protections with excess liability coverage.
Myth 2: Excess Liability Coverage Is Expensive and Unnecessary
Another misconception that community associations may have is that excess liability coverage is unnecessarily costly, particularly if they have a limited budget. This belief can lead them to overlook this vital coverage, which leaves them vulnerable to financial challenges. As an agent, it is your role to debunk this myth and ensure your clients have enough liability coverage for their risk management needs.
Let your clients know that excess liability coverage comes at a fraction of the cost of their primary liability and offers valuable protections as their association grows. The increased responsibilities and risks require adequate protection. Stress the importance of this investment compared to the financial consequences of a claim.
Myth 3: Umbrella and Excess Liability Coverage Are the Same
Umbrella insurance and excess liability coverage cause confusion for many clients. Many assume these policies are the same thing because they seem similar; however, the coverages are different. Umbrella coverage typically offers protection over several kinds of policies, including auto, home insurance, and primary liability coverage. Excess liability extends coverage for the primary liability policy only.
Insurance agents serving community associations should address misconceptions about excess liability insurance to ensure their clients get the proper coverage. Debunking myths helps clients better appreciate the value of this additional line of coverage for reducing their risk exposure.
As an insurance agent, you are a trusted resource for guiding clients to the proper coverage levels. Show your commitment to appropriate coverage for your clients with comprehensive risk management assessments and education about excess liability protection for their community association and the threats it faces.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.