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Your Guide To Minimum Coverage To Protect Your Assets

Hand holding umbrella over a bag of money that says assets

Many people assume that their homeowners and auto insurance provide enough coverage to protect their assets in the event that they are sued, but in today’s world lawsuits are more common than ever, which means that your assets are at greater risk than ever before.

Fortunately there are ways to ensure that a lawsuit doesn’t put you at risk of losing all of your assets, but there are a few key ideas to understand first:

How do you figure out your net worth?

You figure out your net worth by totaling up your assets. Your assets can include a wide range of items, from your physical possessions like cars, jewelry, technology, and the like to your property. Your home, any land that you own, and any other real estate holdings are counted as part of your assets. Your assets also include your investments, your savings, and any other financial accounts you may own. Finally, something many people do not realize is that their assets also include their future earnings.

 

For many people, their home is their largest asset, but taken all together, a person’s total net worth and assets are often greater than they might originally have thought.

 What can happen to your assets if you are sued?

If you find yourself named in a lawsuit and the amount you are sued for exceeds the liability coverage in your home or auto insurance policies, your assets, including your home, could be seized to pay any damages you are found responsible for. After your coverage runs out it’s your assets that are at risk if you are ruled at fault in a lawsuit.

How can you protect your assets in the event of a lawsuit?

In a previous article, we discussed umbrella insurance, and this is where that type of policy kicks in. Even though you can purchase additional liability coverage beyond the state minimum on your auto insurance policy, and even though you can purchase fairly extensive liability coverage through your homeowners policy, this may not be enough to protect all of your assets in the event of a legal judgement against you.

Umbrella insurance is designed for exactly this situation. It’s meant to fill in the gaps between your homeowners and auto insurance so that there is greater coverage for your personal assets after your other policies are exhausted.

 

How much umbrella insurance should you purchase?

Umbrella insurance is generally sold in increments of $1 million, and policies typically range between $1 million and $5 million in coverage. Your insurance agent can help you determine what amount of coverage is best for you.

 

Protecting your assets is more important now than ever, and the good news is that it doesn’t have to be difficult or overly costly. Talk with Superior Insurance and Auto Tags today about making sure you have coverage in place to protect your assets!

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