Dedicated to Deposits: Deals, Data, and Discussion
Featured Savings Rates
Featured Accounts
Back to General Discussion

The Importance Of Umbrella Insurance

Thursday, October 21, 2010 - 6:31 PM
This post at Free Money Finance provides a very favorable opinion for not only having Umbrella Insurance but also having plenty of coverage:
you need to have enough coverage to satisfy the worst judgment you might receive. Coverage of $2 to $4 million will suffice for most of today's lawsuits

Is $2 to $4 million in umbrella insurance coverage really necessary for those who don't have that much in assets?
3
Ken TuminKen Tumin5,441 posts since
Nov 29, 2009
Rep Points: 123,675
1. Thursday, October 21, 2010 - 9:54 PM
"Is $2 to $4 million in umbrella insurance coverage really necessary for those who don't have that much in assets?"

Well, let's say you have $500,000 in assets.

You get hit with a $2,000,000 judgment.

If you only have $1,000,000 in insurance, the insurance company pays $1,000,000 and you pay $500,000 and the holder of the judgment gets  x number of years to collect an additional $500,000 from your future earnings or other assets you acquire (like an inheritance).

If you have $2,000,000 in insurance, the insurance company pays out $2,000,000 and you get to keep your stuff.

Of course, you do have the option of filing for bankruptcy.
3
nojajanojaja2 posts since
Jul 2, 2010
Rep Points: 8
Reply