It’s a classic good news/bad news scenario. From 2000 to 2006, the frequency of claims for the three major areas of auto insurance coverage – property damage, bodily injury, and personal injury – declined by as much as 19%. Unfortunately, the severity of claims in these three areas climbed by as much as 22% during the same period.
Have you reviewed your liability insurance coverage lately? A look at your homeowners and automobile insurance policies may determine whether you have enough coverage to help protect your hard-earned assets. If you don’t, your home, your retirement, and even your future earnings could be vulnerable to claims or judgments that exceed your insurance coverage.
Coverage Above and Beyond
If your net worth exceeds the amount of liability coverage provided by your homeowners and auto insurance policies (each usually tops out somewhere between $300,000 and $500,000), you might want to consider an umbrella liability insurance policy.
Umbrella liability insurance adds an extra layer of protection, usually in $1 million increments, that takes effect when the limits of your homeowners and auto insurance policies are exhausted. In order for you to obtain an umbrella policy, the insurance company will typically require you to raise the liability limits on your existing policies to the maximum level available. These policies then serve as a deductible for the umbrella policy.
Umbrella liability coverage tends to be relatively inexpensive. One million dollars of coverage can cost as little as a few hundred dollars per year.
As your personal assets grow, shouldn’t your protection rise as well? Umbrella liability insurance can help protect.
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