Wednesday, October 29, 2014

Don't forget your umbrella!

Don't forget your umbrella...and I don't mean because it is raining out today. Many people I speak with that have asked me to 'shop' their insurance around for them have lower liability limits than what they should have to adequately protect themselves and their family in the event of a liability claim or lawsuit.  

New York State minimum liability limits on a personal auto policy are 25/50/10.  What do those limits mean?  If you are a responsible party in an automobile accident you have $25,000 per person and $50,000 for the total accident with regards to bodily injury and $10,000 for property damage.  If you hit someone that is driving a newer vehicle and they total their vehicle - you are going to come up short and your personal assets could be at risk.  

On a homeowner policy there is no minimum but in most cases I see policies with $100,000 personal liability protection.  This covers you if someone is hurt on your property or are a victim of a personal liability lawsuit..this protection follows you everywhere.  It is also the least expensive coverage on the policy - you could easily increase your limit to $500,000 and it is usually about $25.00 a year for that coverage!

So what can you do?  If you are a homeowner we recommend liability limits of nothing less than $100,000/$300,000/$100,000 on your auto policy and $500,000 on your home insurance policy.  You can never have enough liability protection. These limits can be increased up to $1,000,000. Besides increasing your liability limits on your home and auto you may want to consider a personal umbrella policy as well.  These are very inexpensive and add an extra layer of protection at least a million dollars over and above the limits on your auto and home.

So how much do you need?  Here is a worksheet - to do some quick calculations and find out how much liability protection you should have:

First do a financial assessment:

How much equity do you have in your home: ___________________

How much equity do you have in your autos: ___________________

How much do you have in investments:  _______________________

How much do you have in checking/savings: ____________________

Other assets: ____________________________________________

Total amount you have at risk: ______________________________  (add the amounts above)

Second review your current Insurance protection: 

Auto Liability: _______________________________

Personal Umbrella Liability: ____________________

"At Risk Gap" (What you need vs. what you have): ___________________________________

Personal Liability: (Home/Condo/Renters): ______________________

Personal Umbrella Liability: ___________________

"At Risk Gap" (What you need vs. what you have): ___________________________________

If responsible for an auto accident, you might have to pay for property losses like car damage and loss of use and for liability losses you may be responsible for loss of wages and medical bills.

A personal umbrella policy is very inexpensive especially when you consider what you gain.

Lastly, If you are an owner of a business it is extremely important you have a personal umbrella policy.  You may have set up an LLC or a corporation to protect your personal assets in the event of a business liability claim or lawsuit but what you may not know is that it doesn't work the other way around.  If you are a victim of a personal liability claim or lawsuit your business assets - regardless of the type of entity - may be at risk.

Don't wait another day - call us for a free review of your current policy or policies - even if they are with another agent. We will help you determine what you need and they best way to protect yourself, your family, your business and your assets.  

Saving a few dollars today could cost you thousands in the future. Don't get caught in a storm - without your umbrella!




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