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Thanks to extraordinary
housing appreciation in the past few years, many homeowners in California are
now millionaires. If someone sues, homeowners have a lot more to lose. Homeowner's
and auto insurance policies cover only up to policy limits. A major tragedy or
catastrophic accident can cause a financial nightmare. What's at stake is the
biggest asset most people have - their home. If you get in a traffic accident,
you could end up on the losing end of a lawsuit. Or if your dog bites someone,
you could easily be sued. If you have a swimming pool or trampoline, you have
increased risk. Even if you don't have a dog or a pool or trampoline or any high-risk
liabilities, when you have a garage sale, you are taking on big liability when
you are inviting strangers onto your property. We
live in a very litigious society, its common knowledge that nowadays people sue
at the drop of a hat. Lawyers are happy to take cases against real estate owners.
More and more
homeowners are buying personal umbrella policies in addition to the standard policies.
Many financial planners as well as insurance agents recommend purchasing personal
umbrella policies. This type of policy typically kicks in after the liability
limits of homeowner's or auto insurance are maxed out. The costs of umbrella policies
vary but it will be about $200 to $300 annually per million dollars of coverage.
That's on top of homeowner's and car insurance. The question is, is that enough?
How much coverage
is going to be enough? If you want to have 10 million dollars of coverage, your
premium could be $2,000 to $3,000 per year in addition to ever increasing premiums
of your standard policies. But will that really be enough? If
you're a real estate owner of any kind, and also own cars, stock portfolio, saving
accounts, and other substantial assets, just having higher insurance coverage
is NOT the answer. Instead, I strongly recommend you have an Asset Protection
strategy customized for your specific situation. Asset Protection means your assets
are legally sheltered. Lawyers won't be able to find your assets, so they won't
bother suing you. For
free consultation about asset protection, please contact me.
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