Personal Asset Protection Strategy - Umbrella Insurance

If you don't have umbrella insurance you are leaving all of your assets open to great risk. What would happen to your home and other assets if you were hit with a million dollar lawsuit? If you had umbrella insurance you wouldn't need to worry.

An umbrella insurance policy can be written for anywhere between a million and five million dollars worth of coverage. It is meant to kick in when your homeowners or auto insurance coverage runs out.

So if you or someone in your family were driving their car and were the cause of a major accident, you would probably get sued for a larger amount than your auto insurance would cover. Also, if your home has a trampoline, swing set or swimming pool you may be at higher risk of being sued if a neighborhood child came over and was injured some how. The umbrella insurance pays for all the legal fees and covers any costs associated with your liability.

It is basically a blanket coverage meaning it will protect you from any type of non-business liability. If you want business coverage you could always purchase separate business liability insurance. Umbrella insurance should be considered necessary if you have equity in your home, bring in a decent salary and have any other assets. Without this coverage a potential lawsuit could wipe everything out and not just what you have now, but it can take from you for years to come in order to satisfy the judgment.

Thankfully umbrella insurance is relatively inexpensive to buy. You can buy a million dollars worth of coverage for about $200 a year. Even if you were to only get hit with one lawsuit in your lifetime, this is a very small price to pay in order to let someone else foot the bill. You cannot afford to not be covered because there are far too many lawsuits that can arise from things out of your control.