Is Your Umbrella Open?

When unexpected storm clouds roll into your life, you don’t want to be caught without an umbrella. Insurance plays a critical role in protecting you from getting drenched—and for a truly robust wealth plan, it’s important to have more than bare-minimum coverage. That’s why our financial planning consultations always include a discussion of extending insurance beyond the traditional offerings.

A personal umbrella insurance policy—one that kicks in after the liabilityLiabilities are calculated by adding up your existing debts (mortgage, car loans, student loans, credit cards, etc.). limits of your auto and homeowners policies are exhausted—can protect against potentially devastating liability claims. How does it work? Let’s say you’re at fault in a car accident and the cost of injuries to others is $600,000. Your auto insurance policy has a bodily injury limit that tops out at $300,000; absent umbrella coverage, you’re on the hook for the next $300,000. With a sufficient umbrella policy, you would have coverage for the additional damages.

Working with your wealth management team, our financial planners can help you determine the appropriate amount for an umbrella insurance policy. Generally, we recommend that it should roughly mirror your liquid net worth—that’s a reliable way to ensure everything you own will be protected against any potential litigation.

Unsure of your net worth? Start by listing your assets: Bank accounts, investments, home equityThe amount of money that would be returned to shareholders if a company’s assets were sold off and all its debt repaid.. Then add up liabilitiesLiabilities are calculated by adding up your existing debts (mortgage, car loans, student loans, credit cards, etc.).: Mortgage, car and student loans, credit card balances, etc. Subtract the liabilities from your assets and presto! That’s your net worth.

If you’d like help in figuring out if umbrella insurance is right for you, or whether your current coverage is adequate, please contact your portfolio team. We’re here to help you.

About Adviser Investments

Adviser is a full-service wealth management firm, offering investment management, financial and tax planning, managed individual bond portfolios, and 401(k) advisory services. We’ve been helping individuals, trustsA legal document that functions as an instruction manual to how you want your money managed and spent in your later years as well as how your assets should be distributed after your death. Assets placed in a trust are generally safe from creditors and can be sold by the trustee in short order, avoiding the lengthy and costly probate process., institutions and foundations since 1994. Adviser Investments and its subsidiaries have over 5,000 clients across the country and over $8 billion in assets under management. Our portfolios encompass actively managed funds, ETFsA type of security which allows investors to indirectly invest in an underlying basket of financial instruments (these may include stocks, bonds, commodities or other types of instruments). Shares in an ETF are publicly traded on an exchange, and the price of an ETF’s shares will fluctuate throughout the trading day (traditional mutual funds trade only once a day). For example, one popular ETF tracks the companies in the S&P 500, so buying a share of the ETF gets an investor exposure to all 500 companies in the index., socially responsible investments and tactical asset allocation strategies, and we’re experts on Fidelity and Vanguard mutual funds. We take pride in being The Adviser You Can Talk To. To see a full list of our awards and recognitions, click here, and for more information, please visit www.adviserinvestments.com or call 800-492-6868.