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Umbrella Insurance for Rainy Days…and Broken Arms

Life is unpredictable, and sometimes unexpected events can rain on our parade. A few years ago, friends were visiting us from out of state.  Our kids were at that really rambunctious stage and some high-flying playing in the basement resulted in the broken arm of one of our friends’ kids.   Suddenly, I’m liable for the injury.  Thankfully, the break was not bad, and my homeowner’s policy had a built-in liability rider for situations just like this.  But what if the injury was more serious?  What if a car accident led to serious injury to others or loss of life? What if a fall at your home results in the same?  These are prime examples of the value of umbrella liability insurance.

Umbrella coverage provides liability protection over and above the already built-in limits to your personal home and auto insurance.  These limits may cover typical accidents or forms of liability, but in some cases, they are not nearly enough to protect you against larger risks.  Note that liability associated with a business should be covered separately.

But what is at risk?  The reality is that assets that are not otherwise protected from lawsuits such as bank accounts, non-retirement investment accounts, jewelry, and real estate that is not your primary residence could be subject to loss if you are found liable for another’s loss.

Protecting these assets is important when their value exceeds the limits already built into your policy.  Umbrella liability coverage is typically purchased in amounts between $1,000,000 and $5,000,000.  For the protection it provides, it is very affordable.

We’ve begun documenting the umbrella liability protection our clients have, and we will continue to include this part of asset protection in our meetings going forward.  If you have any questions about your loss exposure, please call us or contact your personal insurance agent for more details.  Growing our assets is important, but so is protecting them from the multitude of other risks that are out there.

Any opinions are those of Landon Vick and not necessarily those of RJFS or Raymond James. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete; it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decisions. 

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