Purchasing umbrella insurance is an excellent move if you have significant savings, assets, and income that you want to protect. However, it’s critical that you be careful when purchasing umbrella insurance not to make mistakes that can hurt you financially. Here are some typical mistakes people make with umbrella insurance that every resident of the greater Williamston, MI community, looking to purchase this policy should know.
Common Mistakes People Make With Umbrella Insurance
1. Purchasing Way Too Much Coverage
What you don’t have can’t be taken from you. This means that even if it’s determined that you are liable for $3 million in damages, you don’t have to worry about losing much if your savings, assets, and income are way below that value. Many people usually make the mistake of purchasing millions of dollars worth of umbrella insurance, yet their net worth is below a million—this way too much coverage. At CG Insurance Agency, we advise that if your net worth is below a million dollars, only take a million dollars in umbrella coverage.
2. Purchasing Way Too Little Coverage
On the other hand, some people purchase way too little umbrella coverage. Let’s say you have $10 million in savings, assets, and income, and you only take a million dollars in umbrella coverage. This is way too little coverage, and it could lead to your investments, savings, and income being used to settle your liability. If you are a homeowner, you cant take the same amount of umbrella coverage as a renter since you have a valuable asset – your home – which can be seized to settle your liability. You need more umbrella coverage than a renter.
3. Overlooking Recreational Assets
When most people purchase umbrella insurance, they want to protect their homes, savings, investments, and other mainstream assets. However, they overlook recreational assets like their boats, motorbikes, and RV. This usually leads them to take way too less umbrella coverage, leaving their recreational assets at risk of being seized.
Contact CG Insurance Agency for umbrella insurance deals in Williamston, MI.