Do I Need an Umbrella Liability Policy?
The most cost-effective way to protect your assets is with proper insurance. So, if you’re like many people, sometimes you wonder, “Do I need an umbrella liability policy?”
In this brief video, David shares that the most cost-effective way to protect your assets is by using the proper insurance, including the strategic use of an umbrella liability policy. As estate planning attorneys and asset protection attorneys will tell you, it’s better to have a proper line of defense with insurance, as opposed to trying to protect your assets after litigation occurs and you’re paying attorney’s fees.
What is an Umbrella Liability Policy?
In the simplest of terms, an umbrella liability policy overlays all your other insurance policies. For example, an umbrella liability is a type of personal lability insurance that covers claims above and beyond the coverage you have with your automobile policy, your homeowner’s policy, watercraft insurance, or similar types of insurance. An umbrella liability policy is intended to protect you (and usually your family) from large liability claims or judgements, which would typically be bodily or personal injury claims, property damage, or other similar types of claims.
Generally speaking, the overlay covers all that you own and want to protect from personal liability in litigation.
Insurance is Your Defense for Litigation
Estate planning attorneys and asset protection attorneys will tell you that it’s better to have a proper line of defense with insurance, as opposed to trying to protect your assets after litigation occurs and you’re paying for attorneys.
Umbrella Policy Prevents Personal Liability in Litigation
In an umbrella liability policy, the reason it’s called umbrella is that it overlays all your policies. Your auto policy, your homeowner’s policy, or maybe if you have a watercraft.
The overlay covers all that you own and want to protect from personal liability in litigation. To avoid litigation, people ask “what’s the appropriate amount to cover me?”
$1 Million in Coverage is a Starting Value
And usually, the starting value is $1 million dollars of coverage. I think what you’ll find that a lot of times is those premiums are very reasonable to give you the extra million dollars of protection, or $2 million, or $5 million as your net worth grows.
What I would say is that as your wealth grows, usually there’s a reason or there’s a need for adding additional liability protection. This is so that you protect more of those assets that you’ve worked hard to earn, save, and invest.
