Estate Planning

Can You Afford Breakfast?

By Jennifer Sawday

Then you can afford an extra measure of asset protection via your regular fire insurance policy on your home. Most of us call it homeowner's insurance policy, but the agents call it fire insurance. In any event, I made a visit to my local insurance agent to review my policy. I was on my way back from court during lunchtime. I thought it was a good idea especially since all of the premiums were due this past month to make a visit to do the annual review that everyone talks about.

I discovered that for my homeowner's insurance, I was covered for $1,000 for medical payments and $100,000 for personal liability. While I am not an insurance specialist, I understood that these payments would be made on behalf should someone be injured on my property. The $1,000 would be for medical payments and the $100,000 would be for any liability on my behalf. To me, without further investigation, these figures seemed really low and inadequate insurance.

I inquired on raising these limits and figured it would cost a few hundred dollars more in premium increases.

I asked my agent to run a new quote for maximum medical payments of $10,000 and maximum personal liability for $500,000.  The premium increased a whopping $32.00 annually.

For $32! This was less than what I paid for breakfast last weekend for my family as the tab at local diner came to $38.

I urge you to review your existing insurance policies and increase your coverages to give you and your family added asset protection. Without full coverage insurance, should you be found liable for any reason, they may go after your other assets like your home itself, your car and any other savings you may have. Some assets are exempt, but that is not the point of this post. The point is that when clients talk about asset protection they sometimes get visions of doing an offshore trust when all is needed is an extra few bucks to increase your insurance coverages.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Full post as published by Estate Planning Practice Blog on January 23, 2009 (boomark / email).