Liability insurance, also known as personal mutual insurance, is another product we use to keep our assets in touch. Since we live in a contentious society, we think it is a good strategy to have an insurance policy that can withstand a financial error caused by a lawsuit.
What is personal liability insurance?
Your home and auto insurance policies have added liability protection to their contracts. If you are found careless in a situation where someone has been injured, your liability protection will pay for things like personal medical bills, rehabilitation, lost wages, etc.
However, the amounts of cover are relatively small and can be quickly exhausted depending on the severity of the other party's injuries.
Protection against a general liability insurance policy will be triggered when the protection against the liability of your other policies is no longer sufficient. It gives you and your strengths additional protection.
How about an example of the importance of this policy?
Let's say Bill hurts Anne in a car accident. Due to the severity of Anne's injuries, she is now disabled and cannot return to work. Her medical bills are $ 50,000.
Good news and bad news. Good news: Bill's auto insurance policy has liability coverage of $ 50,000. Bad news: do you think Anne and her lawyer will only go after $ 50,000?
Not likely. Remember...
She can no longer work and support her family, she can no longer finance her retirement. She will have to pay medical costs because of her disability. Financial difficulties are accompanied by emotional distress.
So if you consider his loss of wages for 20 years, his medical expenses, his retirement, and his personal therapy, you are considering the possibility of millions of dollars. If Bill does not have personal liability insurance, his assets are exposed.
So what exposed mean? They could attack your house, cars, boat, bank accounts, 401k, etc. Any asset held under your name is at risk.
But you don't even have to be "physically" involved in the injury scene to be in danger. If someone is injured in your home and you are held liable for damage, your property is in danger if you do not have sufficient coverage.
This article is not intended to scare you. It is not intended to invoke fear. We encourage you to take preventive measures. We want to encourage you to take action to protect your heritage. Like putting your seatbelt in a car, an umbrella policy is an extra layer of protection.
My wife and I have an umbrella policy that provides a surplus of $ 5 million, greater than the coverage offered by our home and auto insurance policies. We only pay $ 531 a year for the police. As you can see, the premiums are relatively low.
So consider the benefits of these policies. Use a general policy to cover your assets. Remember ... sometimes when it rains, it rains.
