What’s something that can destroy your savings in a short amount of time? A lawsuit. Only 1 in 10 of people have excess liability to protect their assets from being confiscated during a lawsuit causing 10 percent of people to give up at least $100,000 in legal judgements. Here’s how to protect your assets before a lawsuit transpires:
An Umbrella Policy
Your home and auto insurance policies offer a certain amount of liability coverage in the event you’re sued for bodily injury or property damage. Most homeowner’s policies offer at least $100,000 in liability insurance and generally, your auto insurance offers up to $250,000 for bodily injury per person, $500,000 per accident and $100,000 for property damage.
To cover claims greater than your auto and home policies will provide, insurers sell excess liability coverage or what is commonly known as, an Umbrella Policy. You can purchase $1 million of coverage for most commonly $150 to $300 per year. Without an Umbrella Policy, you would be held responsible for any dollar amount over what your home and car policies cover.
Asset seizure and protection
During a lawsuit, many of your assets are at risk, including:
- Your house
- Retirement account
- Cash value of your life insurance policy
- Future earnings
Some of your assets may have built-in protections such as your 401k plan due to the Employee Retirement Income Security Act (ERISA).
The Right Amount of Coverage
Not only should you cover your net worth and future earnings, but you should also weigh other factors that can expose you to litigation such as multiple residences or having children.
Don’t fall victim to a lawsuit due to not having the right amount of coverage, call NorthEast Insurance at (732) 972-1771 ext. 1109. We can help in protecting everything you have worked so hard for!