Personal Liability Insurance

Do you have it? Do you have enough? Does it cover what you think it does?

What would happen if….

• You were at cause/fault in a car accident in which someone was badly injured or worse?
• Someone else was driving your car and the same thing happened?
• Someone got hurt stepping down the stairs of your porch?
• An animal you own wandered out onto the road and caused a bad accident?
• You were fishing with some kids and one of them fell out of the boat, bumping his head?
• You carried a snake to the golf course in your golf bag and it slithered out at the club and bit someone? (True story)

Life happens, and unfortunately, we live in a suit happy time in our history. Someone gets hurt and goes to an attorney to see if there are any reparations available. The next thing you know, you’re being served with a “discovery” of your financial situation. You are required by law to fill it out. The attorney sees your success, and guess what? He thinks the victim just might have a case regardless of the actual circumstances.

If this happened to you, what would you do? I’m guessing that you would seek an attorney and pray, or vice versa.

What if you didn’t have to do this? When you have liability insurance set up appropriately, you often don’t. Your first call would be to your insurance agent instead of an attorney. With the appropriate insurance, the insurance company itself would be your first and perhaps the only line of defense needed.

You may believe that you have everything in place right now, but it may be the furthest thing from the truth. Too often, we review policies only to find out there are holes everywhere: It would cover this, but not that…. It would work in this event, but not that event…. It would only cover this amount in this situation…which is, way too many times, not nearly enough.

Here are a few things for you to consider today:

1. A general rule of thumb is that you should carry enough liability insurance with your base policies and umbrella to cover your total worth less your protected assets. This is not a rule, but a general rule.
2. Does your agent have a complete view of your situation—entities, trusts, assets owned, other insurance, dependents and live-ins, businesses, rentals, employees, hobbies, farm and ranch activities?
3. Are you communicating these changes on a regular basis with your agent?
4. Are your life planner, financial advisor, attorney, and agent working together to review your situation from time to time?

No one likes insurance. Well, no one that I have met. Nevertheless, it is one of the most critical components of protecting your hard-earned success.

I want to leave you with one final story. We were helping one of the families we work with look at their personal liability in relation to their situation. This family had about $10,000,000 of worth at the time and only $500,000 of liability protection. We recommended an immediate call to their agent to increase this. Well, procrastination killed the cat! A few weeks later we received a call that the husband had hit a car and a little boy would be injured for life…The call came because they didn’t call their agent.

Don’t let this be your story. Make sure you know what you need and know what you have, then act on it.