Protecting Your Nest Egg

by Tyler C. Smith, Brightway Insurance

A retirement nest egg may make you feel like you’ve locked down your financial future, but don’t get too comfortable. Getting hit with a liability lawsuit in your retirement years could turn life upside down.

While your insurance may cover some damages or legal fees, an umbrella insurance plan goes further. It protects you and your assets if you are held liable for a claim exceeding the coverage of your other insurance policies. Without such coverage, your assets could be in trouble.

Umbrella insurance is liability coverage that goes above and beyond what your homeowners, renters and auto insurance policies provide. Umbrella coverage has higher limits with a broader range of coverage, including claims involving bodily injury, property damage and issues such as libel, slander and defamation of character.

If you’re sued or found liable for damages, umbrella policies will pay not only the monetary damage costs, but also attorney fees and other court costs. Having such coverage can prevent another party from going after your assets if damages and legal costs exceed the limits of your regular policy.

So how much coverage do you need? In general, you’ll want enough coverage to at least cover your net worth. Calculate the value of your retirement and other assets you have vs. your debt to determine your net worth. For most, $1 million in liability coverage will be enough; if your net worth is higher, consider bumping up your coverage accordingly.

Before choosing a plan, it’s a good idea to sit down with your property and casualty agent to make sure you will be adequately insured in case of a liability lawsuit. If you have any doubts, get a second opinion. Whether you’re approaching retirement or getting ready to send your kids to college, an umbrella policy would protect your assets and prevent you from having to start over rebuilding that nest egg.

Tyler Smith is an Agent-Owner at Brightway Insurance on Daniels Parkway. You may reach him by calling 239-603-8200.

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