How Much Insurance?
Tracy wants to know Dave's take on car insurance.
QUESTION: Tracy has never heard Dave talk about auto insurance. Can he break it down for her, such as how much she needs?
ANSWER: The only question on how much car insurance is on the liability side. You want to carry as much liability insurance as you can carry, around $500,000 or so. Liability auto insurance is the cheapest kind of insurance and the best buy in the entire insurance world. Always kick the liability up. The reason being is that, if you’re in a wreck and it’s your fault, it pays for anything that’s your fault, whether it’s the fixing of the car or the health of the humans on the other side.
The more wealth you build, the more you also want to get a liability umbrella policy that attaches to the top of that policy and keeps going for another million dollars. And that’s only a couple hundred dollars a year.