Baron Financial Team Answers Questions About
“Your Personal EconomySM”
Presented by Victor Cannillo, NAPFA-Registered Financial Advisor
Today’s question is on Umbrella Insurance. What is it and why do I need it?
View or listen to our video to learn more
You probably have homeowner’s insurance for your home and car insurance for your vehicle, but do you have umbrella insurance? In a society where many of us are concerned about personal liability and the possibility of being sued rightly or wrongly, the more assets you accumulate the more important personal liability protection becomes.
What is it and why do I need it?
Umbrella insurance will help to cover your legal expenses if someone is injured by your car or in your home. For example, imagine that you are driving to the grocery store on a Saturday afternoon. You brake for a running deer and the person behind you rear-ends your car and is injured. Now, the other driver wants to sue you for more than your auto policy will cover. This is where umbrella insurance would come into play. Umbrella insurance will help you pay for the difference instead of having to take that money out of your own personal savings.
When looking to get Umbrella Insurance, there are a few things you may want to know:
- You must ask for Umbrella Liability Insurance. Since the commissions are so small, your insurance agent may neglect to mention it.
- Insurance companies may require you to carry a required amount of liability insurance on your homeowners and automobile policies and to place both your auto and homeowner’s policy with the same company. Perhaps do some research or talk to your insurance agent about this.
- Depending on your situation, you may want to look to either have enough protection to exceed your assets or carry a minimum of $2 million of personal liability with an inexpensive umbrella liability policy.
For our clients, please contact your Baron Team for guidance with any insurance questions.
For others watching, please reach out to us for a complimentary second opinion on your current financial plan.
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Disclosure: This is a general communication being provided for informational purposes only. This material is not intended to be relied upon as a forecast, research, tax or investment advice.