How To Keep Your Hard-Earned Investments From Being Wiped Out
from daveramsey.com on 04 May 2011
"It is better to be careful a hundred times than to be killed once," someone once said, and most of us would agree that it's worth a bit of effort to protect what's ours.
Unfortunately, many people who have worked to build wealth aren't doing all they can to protect it.
What if you were responsible for an automobile accident that involved several vehicles with multiple passengers? Your auto insurance liability coverage would pay up to its limit, which tops out around $500,000. But the medical bills in an accident like this could go into the millions of dollars.
You'll likely be sued for the difference. Your investments and savings, your home and any inheritance you could receive are up for grabs. Your wages could even be garnished for the next 10 years! And, win or lose, you'll be responsible for your legal fees, and while that may not wipe you out completely, it will severely dent the assets you've worked hard to build.
This is just one example of how a simple accident could destroy you financially. In America, you can be sued by anyone for any reason, and if you've built up any assets at all, you're a target.
It's not enough to just have homeowner's or auto insurance coverage. Smart investors take things a step further.
Coverage That Protects Your Wealth
By the time you have a net worth of $500,000, you need to add liability umbrella insurance coverage. Most homeowner's and auto insurance policies have a liability limit, which means if someone were hurt in your home or in an auto accident that was your fault, the insurance company would cover you up to the limit—$500,000 in our example above.
An umbrella policy adds liability coverage to your existing homeowner's and auto policies and covers you beyond the $500,000 limit—giving you added protection in case you're sued or the other party's medical bills exceed the limit of your policy's coverage. A $1 million umbrella policy is a great value—usually less than $300 per year—and it will extend your liability coverage from $500,000 to $1.5 million. It protects the wealth you've built and enables you to keep on building it.
Professional Insurance And Investment Advice
Don't delay in taking this step to protect your assets. If you need an umbrella policy, one of Dave's insurance Endorsed Local Providers (ELPs) can find the right coverage for you.
If you have questions about investing, you can also work with an investing ELP to build your investment portfolio Dave's way. Contact your ELP today!