Personal liability insurance, also known as general personal insurance, is another product we use to keep our assets intact. Since we live in a disputed society, we believe it is a good strategy to have an insurance policy that can withstand a financial error caused by a lawsuit.

What is personal liability insurance?

Auto and homeowners insurance policies have additional liability protection within their contracts. If you are found negligent in a situation where someone was injured, your liability protection will pay for things like personal medical bills, rehabilitation, lost wages, etc.

However, the coverage amounts are relatively low and can quickly run out depending on the severity of the other party’s injuries.

The protection of a general personal liability insurance policy will kick in once the liability protection of your other policies is no longer sufficient. Gives you and your assets added protection.

How about an example of where this policy is important?

Let’s say Bill insults Anne in a car accident. Due to the severity of Anne’s injuries, she is now disabled and cannot return to work. His medical bills are $ 50,000.

Good and bad news. Good news: Bill’s auto insurance policy has $ 50,000 liability coverage. Bad news: Do you think Anne and her attorney will only go for $ 50,000?

It is not probable. Remember …

He can no longer work and support his family. You can no longer finance your retirement. You have ongoing medical bills that you will have to pay due to your disability. Along with financial hardship comes emotional distress.

So if you consider your 20-year lost wages, medical bills, retirement, and personal therapy, you’re considering the millions of dollars. If Bill doesn’t have personal liability insurance, his assets are exposed.

So what does he do exposed to mean? They could go after your house, cars, boat, bank accounts, 401k, etc. Any asset owned in your name is at risk.

But you don’t even have to be “physically” involved at the scene of the injury to be at risk. If someone is injured in your home and you are responsible for the damages, then your assets are at risk if you don’t have enough coverage.

This article is not intended to scare you. It is not meant to invoke fear. We encourage you to take preventive measures. We want to inspire you to take action to protect your wealth. Like wearing a seatbelt in a car, an umbrella policy is an added layer of protection.

My wife and I have a blanket policy that provides $ 5 million in excess, over and above the coverage provided by our home and auto policies. We only pay $ 531 a year for the policy. As you can see, the premiums are relatively low.

Therefore, consider the benefits of these policies. Use a blanket policy to cover your assets. Remember … sometimes when it rains, it pours.