Have you checked your insurance lately?

S.F. Ehrlich Associates |

March 31, 2022

If you have assets, you may unknowingly be at risk from a personal liability claim. (If you don’t have assets, you’re probably covered by a line from the Bob Dylan song, Like a Rolling Stone: “When you ain’t got nothing, you got nothing to lose.”)

A standard homeowner’s insurance policy, for example, may provide $100,000 to $500,000 in liability protection. Unfortunately, that coverage could fall short in certain situations. An example: You have a dog that bites a young child who requires cosmetic surgery. In that situation, assume the upper limit of your policy will be breached if you are sued.1 (Don’t have a dog? No problem, except when someone visits you and their dog bites a child while on your property.)

Another example involves your motor vehicle. Aside from any accidents where you may be at fault, your liability extends when you loan that vehicle to a friend. Or an adult child. Or a grandchild. Should another driver be at fault while driving your car, the upper limits of your auto insurance policy may also be exceeded by a settlement. (If you own a boat, don’t forget to add that to your risk list.)

Unfortunately, these are just a few examples demonstrating how policy limits may be insufficient to cover judgments. Simply put, when the coverage provided by an insurance policy is exceeded by a judgment, investment assets may have to be liquidated to satisfy the claim. In a word: Ouch.

Fortunately, for a relatively low premium, you can purchase excess liability coverage through an umbrella insurance policy. Adding $1,000,000 - $2,000,000 of excess coverage is relatively inexpensive (a few hundred dollars for the first $1,000,000 and less for each $1,000,000 thereafter) and helps to protect your investments and other assets against judgments.  

If you have an insurance agent who handles your homeowner’s policy, request a quote for an umbrella policy. Or call or email us, and we’ll be glad to help. 



1 Robic, Ana. “How to Help Protect Client Portfolios from Excess Liability Claims.” Investment Advisor, Mar. 2022, pp. 46–46.
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