Reviewing Your Home, Auto, and Umbrella Insurance
Rounding out our conversation on insurance planning, we will discuss the insurance that just about everyone has – because in some cases its illegal not to!
Your auto, home and umbrella policies should be evaluated yearly to ensure the coverage is both (1) sufficient and (2) cost effective. For example, this past year I switched home insurance companies because when I spoke with my old company, they told me they were raising premiums because they had an exceptionally high year of hail damage claims in my zip code. When I called around, there were plenty of companies that had not experienced that and had not adjusted their premiums higher.
Below are a few questions to consider:
Auto/home Coverage
What is my liability protection? Is it sufficient if I am sued for more than that?
What is my property damage coverage? Will it pick up the whole tab if I wreck someone’s Porsche?
Can I afford to have a higher deductible and lower my premiums?
Does my policy guarantee full replacement?
Umbrella Coverage
Umbrella insurance acts as…well…an umbrella. It fits over the top of your insurance and picks up the extra costs that the auto or home insurance does not.
For example, if you have $250,000 of liability protection on your auto insurance and you get into a wreck that leads to a $400,000 lawsuit claim, the umbrella picks up the additional $150,000. Fortunately, these events don’t happen often so coverage is cheap – in the ballpark of $150-$250/year for $1,000,000 of coverage.
Questions to consider:
Do I have enough coverage to cover my assets from being used to settle a claim?
Do I have enough coverage to protect my wages from being garnished to settle a claim?
Disclaimer: Alex Voorhees and Reston Wealth Management do not provide legal, accounting or tax advice. This information is not intended to be a substitute for specific individualized insurance, investment, tax or legal advice. We suggest that you discuss your specific situation with a qualified insurance, tax or legal advisor. The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. The views, thoughts, and opinions expressed in this blog belong solely to Alex Voorhees, and not necessarily to Reston Wealth Management. To determine which investment(s) or strategies may be appropriate for you, consult your financial advisor prior to investing. No strategy assures success or protects against loss. You should consider the investment objectives, risks, charges and expenses of any investment carefully before investing. You cannot invest directly in an index.