I am worried about my liability auto insurance limits after reading several accounts on this forum since I believe that any accident, including medical expenses, will result in high expenditures. Right now, I have 250k, 500k, and 250k. Making sure you have enough to cover your net worth is advised while looking up how much to have on Google. That is a lot less than my net worth. However, how does it safeguard your wealth? Because even if your medical expenses were $1 million, would they still take priority over your assets once the $250k has been spent? Are assets in a retirement account safe in such cases as well?
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That is essentially the maximum amount available for a typical auto coverage. I would suggest starting with an umbrella coverage that is approximately $1 million in value. A policy that resides above your house, auto, and other policies is known as an umbrella policy. It essentially increases liability insurance by $1 million. It’s not extremely expensive, but it only kicks in if you have a claim that exceeds your coverage. Mine is, I believe, a few hundred dollars annually.
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From your information, I have noted that your current coverage of $250,000 per person, $500,000 per accident for bodily injury, and $250,000 for property damage is quite too much. However, if your net worth significantly exceeds these limits, you might want to consider increasing them in the future.
Liability insurance helps protect your assets by covering costs associated with injuries and damages you cause in an accident. If the costs exceed your coverage limits, you could be personally liable for the remaining amount. This means your assets, including savings and investments, could be at risk.
Finally, I would advise you to consider purchasing an umbrella insurance policy. This provides additional liability coverage beyond the limits of your auto and home insurance policies, offering an extra layer of protection for your assets.
That’s pretty much the highest you can have in a normal auto policy. I would advise on an umbrella policy of around $1 million (that’s normally where they start). An umbrella policy is a policy that sits above your auto, home, and other policies. It adds 1 million dollars of liability insurance. It only takes effect if you have a claim that exceeds your coverage and price it’s not very expensive. I think mine is a couple hundred dollars a year.