Do You Need Umbrella Liability Insurance?

You buckle up because you know the 0.5 seconds it takes to put on your seatbelt can save you from dying in a car accident.  Or worse… not dying. 

 But how many of us have been - or will ever be - in an accident so bad that your seatbelt saves your life?  Probably not many.  And yet we all buckle up anyways. 

 The chance is small, but the result can be catastrophic.  So we spend 0.5 seconds to reduce that risk to almost zero.

 Similar low percentage events with catastrophic outcomes - your husband drives into a C-level executive walking to work.  Your friend's friend trips and cracks his head on your coffee table during your Super Bowl party.  Your dog gets too aggressive in the dog park and accidentally bites your neighbor while she's trying to break it up.

 Are these experiences we've all had?   Certainly not.  But it's easy to imagine the possibility of any of those happening.

 The catastrophic result for you is not the guilt of running over a CEO, your friend's concussion or your neighbor's lacerated eyeball.

 The catastrophic event is the medical bills and lost wages while they recover.   Who do you think will pay for those?  That's right.  You.  The driver/host/dog owner.

 They could sue you (and win) for everything you have and even future paychecks you haven't been paid yet.   One of those small chance/catastrophic result accidents could change your life forever.

 So put on your seatbelt.  Invest $200 per year for a $1 million umbrella liability policy.  Just call whoever does your home and auto insurance.   It's in addition to the smaller portion of liability insurance included in those policies.

 The rule of thumb is to get as much coverage as you have money in your brokerage, bank and retirement accounts (and at a minimum $1 million).

 Small chance / catastrophic events happen.   That's why you buckle up.  Make sure to also buckle up your financial future.