The value of an excess liability umbrella; should you fork over the money for it?

If you own a home or a vehicle you most likely already carry liability insurance. After all, the State says you must have some liability insurance to legally drive and if you have a mortgage, the mortgage company will require you carry insurance on your home which will include liability insurance. The question is, are the limits on your insurance policy enough to truly protect you. Most experts agree the answer is no, in fact that is an emphatic no.

Several governmental agencies place the value of a human life between $7 million and $9 million dollars. Of course life is priceless and cannot be replaced but when quantified these are the numbers some organizations have come up with. Some of the factors in calculating these numbers of course is earning power or earning potential.

In the State of Arizona, motorist are required to carry, by law, insurance limits for bodily injury or death of only $15,000.00. That is correct, fifteen thousand dollars. For our purposes, we are going to assume a vehicle owner actually values his or her insurance and purchases higher limits of $100,000 for bodily injury or death. The average person does not normally purchase more insurance than this. Most experts recommend at least this amount.

Now, lets assume the worst case scenario happens and you are involved in an accident for which you are determined to be 100% at fault and the result of which, the other driver lost their life. Your auto insurance would settle the claim for $100,000 and they would be done, having met their obligation to protect you up to the limits of your policy. (Again, assuming you purchased $100,000 to begin with.) If the courts determine the value of a human life at even just $1 million, and your insurance stops paying at their maximum policy limit of $100,000, where does the $900,000 still owed come from?

Well, what assets do you have they can go after? How about garnishing your wages for life? Some people answer this question and say they will simply file bankruptcy, but that is not a fun time for anyone and it may not even be permissible depending on what the courts say.

All of this can easily be corrected with an excess liability umbrella. Protect yourself, you family and your assets with an excess liability policy.

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