Recently a friend’s father had a bad motorcycle accident. He’d made it all the way to his street and someone reversed out of their driveway, struck him hard shattering his right leg from the knee down and sending him into a ditch trapped underneath his motorcycle.
It’s been a tough stretch for the family since. Surgeries, skin grafts, lengthy hospital stays, and medical bills.
Lots of medical bills. $600,000 and counting.
He’s on Medicare and not everything is covered, nor is the continued cost of rehab that will now be needed. The family owns property and a business, but is tight on cash. Even if they weren’t, who has hundreds of thousands to burn on medical costs?
The lady who struck him had little insurance. The family hired a lawyer, but she doesn’t have assets to go after either.
My friend’s father had insurance, but he wasn’t at fault and the underinsured/uninsured coverage on his motorcycle insurance only gets the family $25,000.
It’s a bad situation and an example why:
- We talk to our clients at Heritage Financial about their home, auto, and umbrella insurance coverage and review the policies every few years.
- We dedicated our second episode of the Wealthy Behavior podcast to helping you with your personal liability protection.
Minimizing Personal Risk and Liability to Protect your Wealth
Building wealth is rewarding. Not protecting it is a mistake. How much could you lose if you’re sued? Will you have enough if you get injured? And how should you protect yourself from these and other threats?
I spoke to a personal injury lawyer, and he shared the following great insight.
Personal Liability Protection Tips:
- Car accidents and injuries at home are your biggest risks
- Avoid trampolines
- Any home contractors should be insured. Ask for their certificate of insurance.
- Umbrella insurance coverage is cheap. Get it and consider getting up to a few million in total coverage.
- Underinsured/uninsured coverage gets you money if you’re in accident with someone who doesn’t have enough insurance. Get the max you can under your policy ($250,000/$500,000).
- See if your umbrella policy can get you more underinsured/uninsured coverage
- Your rental property and vacation home don’t have the same homestead protection as your primary residence, so you need additional insurance
Be sure to listen to the end as I also talked to a former FBI agent about protecting yourself while on vacation, online, and traveling in your car.
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