An Underused Tool In Estate Plan Strategy: Umbrella Insurance
We love to think life is predictable. But the fact is, life can be—and often is—very unpredictable. Things happen we could never imagine. Of course, these unimaginable and unpredictable events don’t happen every single day in our lives. But when they do, they turn things upside down and sideways.
Sometimes it is unexpected events that happen can literally ruin people’s lives…
I’m not referring to acts of God and nature such as the pandemic or hurricanes, earthquakes, and floods. I’m talking about things like you or your child causing a car accident that results in serious injuries or the deaths of others. Or if your dog was attacked by a stranger on your property and bit the person in self-defense and they sued you. How would you pay for the treatment and damages if someone was hurt and suffered greatly because of injury caused by you or your child or your pet?
This is when an umbrella policy (also called an excess liability policy) can make an important difference as part of your estate plan. This is an often overlooked and underused tool. Yet, it can be the saving grace if such tragedies that I mentioned occur.
Why the Umbrella Policy? Home And Vehicle Coverage Is Not Broad Enough…
We all have insurance policies on our houses and vehicles. But, considering your personal wealth that coverage may not be enough. Most insurance policies top out around $500,000 of liability coverage. If you find yourself involved in a serious accident where someone gets hurt, they may seek damages beyond the limits of your coverage.
An umbrella policy kicks in when your other liability policies (such as your car insurance) hit their limit. For instance, if you’re involved in an accident and are being sued for $1 million, but your car insurance covers only $300,000, your umbrella policy could cover the difference, so you don’t have to use personal assets. As you can see, an umbrella policy protects your assets from larger claims and lawsuits.
Fortunately, umbrella policies tend to be relatively inexpensive, because the severe occurrences that trigger them are uncommon. The cost is determined by a number of factors, including the following:
Number of homes you own, and where they are located
• Number of cars owned, and the number of people being covered (including their driving histories)
• Number of boats and planes and other vehicles you own, such as RVs and motorcycles
• Amount of existing liability coverage you have before adding the umbrella policy
If you would like to add an umbrella policy to your existing estate plan, or create an estate plan, give our office a call at 404-370-0696 and let us get you properly and adequately protected to face any unexpected events.
Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!