When it comes to our personal finances, most of us like to think we are pretty savvy with our money if we can put check marks next to the main necessities in life, such as: owning a home, owning a vehicle, having little or no credit card debt, and even owning some extra toys like a motorcycle or RV.
And, we may even give ourselves an extra pat on the back, if we are steadily saving towards an impressive nest egg… and even investing excess monetary funds into the financial markets, in hopes of earning a significant return on our investments.
If the above statements are relatable to you, then congratulations! You’re doing very well at handling your finances like a pro.
That said, if you could only check off a few…or maybe even none…then odds are you could be at risk! For example, recent studies have shown that only 20% of individuals have sufficiently protected themselves and their assets from liability lawsuits.
Did you know that you don’t have to have large amounts of assets to consider buying a Personal Umbrella Liability Insurance Policy?
In fact, umbrella insurance policies offer additional liability protection coverage that homeowner’s and auto insurance policies do not. This protection is in excess of your basic insurance policies’ coverage.
For example, most liability coverage for home and auto policies do not surpass $500,000. Actually, on average the liability coverage for basic policies is about $300,000.
So what happens, if God forbid, you cause an auto accident that injures a high-income company executive, a physician or a professional athlete? You could have visiting house guests that may severely injure themselves on your property, in your pool or on your trampoline.
While walking your family pet around the neighborhood, Fido could unexpectedly bite a neighbor. What if a relative or friend borrowed your car to run a quick errand and caused a multi-car catastrophic at-fault accident? What do you think would happen if you or one of your children posts something on social media that’s viewed as slanderous?
All of these outcomes can lead to injuries, medical bills or loss wages or worse… like being sued for libel… that could total up to $1 million or more in damages.
These ill-fated events can happen to anyone, at any time. No one is exempt, and all of your life’s hard work, savings and investments can disappear almost instantaneously.
However, it doesn’t have to be this way. By purchasing a personal umbrella liability policy, you can have the peace of mind knowing that you and your family are protected.
These types of policies not only pay for liability settlements, they can also help pay for exceptional legal counsel to represent you in the court of law; something that you may not have otherwise been able to afford.
Personal Umbrella Liability Insurance Policies typically range from $1 million to $5 million worth of protection. The rule of thumb is to purchase $1 million over what you think you need.
To find out more about what a Personal Umbrella Liability Insurance Policy covers and doesn’t cover please call your insurance agent. Some insurance companies require that you have a homeowner’s or auto insurance policy with them with liability coverage of at least $300,000 before granting a Personal Umbrella Policy.
One thing to keep in mind, however, is that Personal Umbrella Liability Insurance Policies usually do not cover personal businesses or related accidents. So make sure your agent walks you through all the information, what’s covered, what’s not, what you need NOW, and what you MAY need in the FUTURE, so that you can have a customized policy to meet your needs.
Wishing you good health & safety,
Ms. Dakar is the author of The Busy Person’s Guide to Personal Finance, a primer to help consumers manage their finances so they can build a substantial nest-egg. She also conducts personal finance seminars where she provides concepts to attain overall financial health.