How To Cover Your Net Worth

How Much Is My Net Worth, Really?

Most of us think we have risk figured out.  We have our cars insured with full coverage, we have our homes or our apartments covered under homeowners or renters policies, respectively.  Almost everyone now has health insurance, and heck, a lot of us even have LIFE insurance.  We’re doing great, right?  Nothing could threaten what we own, let alone our entire net worth.

Unfortunately, these coverages aren’t usually enough.  If you have significant assets, even a mundane car accident could lead to a lawsuit that results in a hefty settlement.  While the liability section of your auto or homeowners policy provides substantial liability protection, usually between $100,000-300,000, the fact of the matter is that courts routinely award greater settlements than what these policies cover.

So, first thing’s first.  How much are you worth?  Because that is how much you have to lose.

Not sure?  Check out a super helpful Net Worth Calculator like this one.

 

Yes, that’s including your Blockbuster stock, Mrs. Conner.

How Likely is a Lawsuit, Really?

Considering that there is an entire industry dedicated to producing them, fairly likely.

According to the U.S. Financial Education Foundation, “[i]t is estimated that over 40 million lawsuits are filed every year in the United States and the total number of registered lawyers exceed one million.”  That’s a lot of paper getting pushed around by a lot of attorneys.  While many deal in matters that have nothing to do with tort law, there are hundreds of firms across the country who make their living by civil litigation such as suing after an auto accident or tripping in front of a person’s home.

It is incredibly easy to find information online urging people to file a lawsuit.  A great example is from Nolo.com, where they have an entire post called “Reasons To File A Car Accident Lawsuit.”  They go so far as to say this in the article:

Personal injury litigation boils down to money. If your lawyer believes that your case is worth significantly more than what the insurer is offering, and it is unlikely that the insurer will increase its offer in pre-suit injury settlement negotiations, then it is time to file a lawsuit. (Emphasis added.)

And what profit-minded attorney wouldn’t think they can get more?  After all, AllLaw.com says litigation lawyers make their money from contingency fees that are based on a percentage of the settlement, and “most contingency fees are between 33 and 40%.”  In order to make real money, they need settlements, and that means encouraging your fellow Americans to take you to court.

Let’s get down to business.

You also need to be on the lookout for Personal Injury suits.  These are lawsuits where someone feels injured or insulted and retaliates in court for damages.  Unfortunately, with the rise of social media and online interactions, these kinds of lawsuits are becoming more and more common.  Similar suits are for defamation, libel, and slander.  While you can be sued if you injury someone physically, you can also be sued if your teenager harasses someone else online.

How Much Will a Lawsuit Cost Me, Really?

It depends on if the suit involves an injury, and the opinion of the jury.

If someone is hurt in an accident, the costs can be exponentially increased.  Not only are medical expenses typically included in a settlement, but also loss of wages and, the wild card, pain and suffering.  Generally, the more severe the accident, the more all of these will cost.  If the worst happens and someone is killed in an accident that you caused, settlements average over $1,000,000.  In cases tried as Wrongful Death suits, awards can go as high as $30-150 Million.  These staggering numbers can see just one accident wipe out a family’s entire savings and all assets.

How Can I Be Protected, Really?

Really?  Get a Personal Umbrella Policy.

Come at me, bro.

These policies, also known as Excess Liability policies, offer liability protection that sits on top of your existing auto, home, and other base policies.  In the event that a lawsuit or legal fees are over what your base level policy provides, your Umbrella policy kicks in, offering over $1 Million to $5 Million dollars in extra protection.  And the crazy thing is that these policies aren’t even expensive.  A $1 Million Umbrella policy is typically between $200-300 a year.  That is a ton of extra coverage for not a lot of money, especially for something that could save you from losing everything you own.

If you have any assets at all, you really should be getting this necessary coverage.  When a trip to the grocery store can routinely cost $200, it should be a no-brainer to get $1 Million dollars of coverage for the same price.

For more information, call us, email us, or fill out the form below, and let one of our helpful agents walk you through what you’re really worth, and how easy it is to protect the whole enchilada.