Protect Your Money From Lawsuits

Umbrella policies pick up where your other coverages leave off, by providing you extra liability protection above and beyond what's offered through auto and homeowners policies.

A Lot of Protection at Little Cost

The good news is that umbrella liability insurance is inexpensive. You can get a lot of protection for very little cost. One million dollars' worth of liability protection above and beyond the liability protection offered by your other policies typically costs less than $250 a year.

To get a rough sense of how much liability protection you need, figure out how much you would stand to lose if you were sued for everything. It's wise to have enough liability protection to cover your net worth plus the amount you project you'll add to your net worth a year out in the future.

Most umbrella policy providers will require that you maintain certain levels of liability coverage in your home and auto policies. Then, your umbrella policy takes over where those underlying liability limits leave off.

And here's a tip: When comparison shopping for an umbrella policy, check with your home and auto insurance carriers. You may be able to get a better rate by having multiple policies with the same carrier.

Cha-ching! That's all for now, courtesy of Money Girl, your guide to a richer life.

As always, everyone's situation is different, so be sure to consult a tax or financial advisor before making important financial decisions. This podcast is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice.

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