Do You Need an Umbrella?

Getting caught in the rain without an umbrella can be an unpleasant experience. Getting caught without appropriate insurance coverage can be more than unpleasant — it could damage your hard-earned financial stability. Having an umbrella policy might make the difference between getting a little "wet" financially and facing a financial downpour.

Another Layer of Protection

Civil lawsuits have dropped in recent years.1 That's the good news. The bad news is that American society is still litigious, and some legal judgments seem excessive. Injuries related to icy walkways, a swimming pool, a dog bite, or an auto accident could lead to a personal liability lawsuit. If you entertain often, employ workers in your home, or have teenagers who drive, you may have additional exposure.

Standard homeowners and auto insurance policies generally cover personal liability, but you may not have enough coverage to protect your income and assets in the event of a high-dollar judgment. That's when umbrella insurance could be a big help, providing additional coverage up to policy limits.

Typically, you can obtain $1 million in coverage for a couple hundred dollars annually; higher coverage amounts can be even more cost-effective.2 Before adding umbrella insurance, however, you generally must purchase the maximum liability coverage on your homeowners and automobile policies, which serve as a deductible for the umbrella policy.

IMAGE

On top of the liability coverage amount, an umbrella policy may help pay legal expenses and compensation for time off from work to defend yourself in court. It might also cover situations not included in standard homeowners policies, such as libel, slander, invasion of privacy, and defamation of character.

Umbrella insurance is not just for wealthy households; it is also appropriate for middle-income families with substantial home equity, retirement savings, and current and future income that could be used to satisfy a large jury award. (Qualified retirement plan assets may have some protection from creditors under federal and/or state law, depending on the type of plan and jurisdiction, but you would still be liable for any judgments.)

It might be helpful to consider your assets, your potential exposure, and your acceptable risks. Protecting yourself with an umbrella policy could help avoid expensive consequences down the road.

 
David Kramer - wealthandtax.pfyfn.com
3478 Buskirk Ave. #270 Pleasant Hill, CA 94523
Phone: (925) 938-3200 Fax: (925) 938-0480

Securities and advisory services offered through Cetera Advisors LLC (doing insurance business in CA as CFGA Insurance Agency), member FINRA, SIPC.

 

This site is published for residents of the United States only. Registered Representatives of Cetera Advisors LLC may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Advisors LLC site at www.ceteraadvisors.com

The registered representative(s) and/or investment adviser representative(s) listed on this website are licensed and registered in the following states:

We are licensed to sell Insurance Products in CA,UT.

[ Online Privacy Policy | Important Disclosures | Business Continuity | Privacy Promise | Order Routing Disclosure | Cetera Advisors ]