During your estate planning updates, evaluate whether you are fully insured. Are your assets and well-being protected? One, commonly overlooked insurance, is umbrella liability insurance. It’s also known as “catastrophic liability insurance.” And, you need it.
The term, “umbrella,” is used because the insurance sits on top of your home owners (or renters) insurance and your auto insurance and raises the coverage to the policy amount, $1 million, $2 million, $10 million. It covers these two insurances like an umbrella.
It’s an incredibly inexpensive insurance and everyone should have it. For example, you can get a $1 million dollar policy for about $150 per year. You do have to pay for the underlying homeowners and auto insurances. However, for the coverage provided, it’s a bargain.
Businesses also need catastrophic liability insurances. For example, an employee may become distracted while driving on the job and cause a fatal accident. Such was the case for one small construction company owner; he had a lot of sleepless nights, but the case settled, eventually, for just under his business catastrophic insurance limit. His business and personal assets were spared.
- As a side note: Consult your estate planning attorney about how you own your business so your personal assets are protected.
It’s very simple to obtain personal catastrophic insurance; it just takes a phone call or email to your property and casualty agent (auto agent) and your signature on a form.
When updating your estate plan, also be sure to analyze your other insurance coverage as well. Do you have life insurance to replace your income, which loved ones depend upon? Do you have appropriate malpractice, business, auto, home, renters, disability, earthquake, and hurricane insurances?
If you are unsure if your insurance coverage is appropriate, or if you want to learn more about umbrella liability insurance, consult with a qualified estate planning attorney.