WalletHub, Financial Company
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The rule of thumb for umbrella insurance is to buy as much coverage as your total net worth, factoring in assets like your home, car, investments, and even your retirement accounts. For example, if you own assets worth $1 million, then you should purchase at least $1 million in umbrella coverage.
Umbrella insurance provides liability coverage beyond the limits of an existing insurance policy. Most umbrella policies also provide coverage for claims involving libel and slander. Since individuals with a moderate or high net worth can be a target for lawsuits, purchasing umbrella insurance can keep your assets from being seized if a liability judgement against you exceeds your home or car insurance limits. As a result, it’s usually a good idea to err on the side of caution and purchase more umbrella coverage rather than less.
For more information, check out WalletHub’s complete guide to umbrella insurance.
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