208-664-8980

1875 N. Lakewood Dr.
Suite 102
Coeur d'Alene, ID 83814

Insurance Read Time: 4 min

Keep Your Umbrella Handy

In 2021, the U.S. had a record 24.5 million millionaires, up from 202 million in the previous year. An increase in personal wealth may bring greater financial flexibility; it may also bring greater liability. Individuals with high net worth, or those who are perceived to have high net worth, may be more likely to be sued. And personal injury claims can cost millions.1

Umbrella liability insurance is designed to put an extra layer of protection between your assets and a potential lawsuit. It provides coverage over and above existing automobile and homeowners insurance limits.

For example, imagine your teenage son borrows your car and gets in an accident, seriously injuring the other driver. The accident results in a lawsuit and a $1 million judgment against you. If your car insurance policy has a liability limit of $500,000, that much should be covered. If you have additional umbrella liability coverage, your policy can be designed to kick in and cover the rest. Without umbrella coverage, you may be responsible for paying out of pocket for the other $500,000, which could mean liquidating assets, losing the equity in your home, or even having your wages garnished.

Umbrella liability insurance is usually sold in increments of $1 million and generally costs just a few hundred dollars a year. It typically covers a broad range of scenarios, including bodily injuries, property damage caused by you or a member of your household, and even libel, slander, false arrest, and defamation of character.

Deciding whether liability coverage is right for you may be a question of lifestyle. You might consider buying a policy if you:

  • Entertain frequently and serve your guests alcohol
  • Operate a business out of your home
  • Give interviews that may be published
  • Drive a lot of miles or have teenage drivers
  • Live in a manner that gives the appearance of wealth
  • Have a dog, especially if the breed is known to be aggressive
  • Own jet skis, a boat, motorcycles, or snowmobiles

Even if you don’t yet have a tent in the millionaire camp, you may want to consider the benefits of liability insurance. You don’t have to be a millionaire to be sued for a million dollars. Anyone who is carefully building a financial portfolio may want to limit their exposure to risk. Umbrella liability can be a fairly inexpensive way to help shelter current assets and future income from the unexpected.

This is a simplified description of coverage. All statements made are subject to the provisions, exclusions, conditions, and limitations of applicable insurance policies. Please refer to actual policy documents for complete details regarding coverage.

Who's Got What?

In 2021, there were over 74 million adults in the United States whose net worth was in the $100,000 to $1 million range (excluding primary residence). Less than 25 million adults had a net worth of $1 million or more.1

1. Credit-Suisse.com, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

 

Related Content

Personal Finance Calendar

Personal Finance Calendar

Use this handy calendar to remember the year’s most important financial dates.

Succeeding at Business Succession

Succeeding at Business Succession

There are a number of reasons for business owners to consider a business succession plan sooner rather than later.

Five Most Overlooked Tax Deductions

Five Most Overlooked Tax Deductions

Five overlooked tax deductions to help manage your tax bill.

 

Have A Question About This Topic?







Thank you! Oops!

Prescription Drug Benefits Under Medicare (Part D)

Do you need to enroll in Medicare Part D? Read this article to learn more about whether you need this coverage

Breaking Down the Parts of Medicare

Medicare is broken down into four specific parts—but what do they mean? This article will help you understand each piece.

Choices for Your 401(k) at a Former Employer

Individuals have three basic choices with the 401(k) account they accrued at a previous employer.

View all articles

How Compound Interest Works

Use this calculator to better see the potential impact of compound interest on an asset.

Capital Gains Tax Estimator

Use this calculator to estimate your capital gains tax.

Estimate Your RMD

Help determine the required minimum distribution from an IRA or other qualified retirement plan.

View all calculators

Long-Term-Care Protection Strategies

The chances of needing long-term care, its cost, and strategies for covering that cost.

5 Smart Investing Principles

Principles that can help create a portfolio designed to pursue investment goals.

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

View all presentations

Where Is the Market Headed?

We all know the stock market can be unpredictable. We all want to know, “What’s next for the financial markets?”

Bridging the Confidence Gap

In the world of finance, the effects of the "confidence gap" can be especially apparent.

Forecast

The market is as unpredictable as the weather. We’d love to help you prepare.

View all videos