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Just Get An Umbrella Policy Already | Series 2.3
Episode 329th March 2021 • Enjoy More 30s: Family Finance • Joseph P. Okaly
00:00:00 00:06:36

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An extremely cost effective, powerful tool to better protect you - are you covered?

  • How are you protected if someone were to sue you? (01:55)
  • Umbrella policy: what is it? (02:54)

Quote for the episode: "So we always want to be having a mindset to protect against the catastrophic."

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC.  TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcripts

Voiceover Audio:

Welcome to the Enjoy More 30s: Family Finance

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podcast, the only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us, stress us out and distract our focus

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from simply enjoying life.

Joseph Okaly:

Hello, and welcome to the third episode in this

Joseph Okaly:

"Your Money Multipliers" series, which is entitled "Just Get An

Joseph Okaly:

Umbrella Policy Already". So today we're going to cover what

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you need to know when it comes to what an umbrella policy even

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is and the protection that it offers, and what you can do to

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actually be taking advantage of it. When I was in high school, I

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got into an accident on the Garden State Parkway. Now, if

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you don't know, this is one of the main highways through New

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Jersey, and quite the nightmare traffic wise when it's in the

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summer. Everybody from North Jersey tries to go down the

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shore on Friday, Saturday. And then they all try to come back

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up Sunday night and are somehow surprised that there are people

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everywhere on the highways, and accidents definitely happen. So

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a driver for me in this instance, was in the next lane

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to me, fell asleep at the wheel, veered into my lane hitting the

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car in front of me. They slammed on their brakes, and I hit into

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the back of them. Everyone was thankfully fine at the scene.

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The police shut down all five lanes or whatever of traffic,

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kind of damning this giant group of speeding cars, which was kind

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of an interesting thing to see. Just under two years later,

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coincidentally right before the statute of limitations expired

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for the driver or for the situation, the driver in front

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of me apparently developed severe neck trauma. Despite

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plenty of what some might call questionable evidence, the jury

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awarded her several hundreds of thousands of dollars. Yeah,

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maybe she was really injured in a way that took, you know, a

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while to actually kick in, you know, who knows?

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Either way what you need to know is that, wrong or right, we live

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in an extremely litigious society, meaning people sue

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everybody. When you purchase your auto and homeowners

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insurance, you may be focused on how that protects your car, and

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how that protects your home. But a hugely important part of that

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is how it protects you from a liability point of view. Or in

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simpler terms, how are you protected if someone were to sue

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you? Standard limits kind of vary by location and by state,

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but we see most policies in the 300 to 500,000 range for

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liability or lawsuit protection for home and auto related

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incidents. Now, upon an initial glance, it seems like, "Hey,

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that's a lot. You know, that's a lot of coverage." People can

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also sue for a lot, remember. If I was the sole participant in

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that accident, the standard auto policy coverage amount may not

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have covered it, and that was 15 plus years ago.

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So what can you do? A coverage option that you can add on top

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of your standard policy limits is something called an umbrella

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policy. If you think of an umbrella, how it kind of covers

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over multiple things, that's the same kind of a concept and why

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it's called the umbrella- it covers your auto and your

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homeowners insurance, it goes over both of those. So this

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provides additional coverage, most commonly for what we see

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it's $1 million or more. And that's added on top of your

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liability protection. And at a cost of maybe $300 a year or

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roughly $25 a month, you can vastly increase your liability

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protection by two to three times, in the event if this were

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ever to happen to you. And you know, I'm not alone in my

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example. We've had several clients over the years who have

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needed to utilize this coverage in order to protect them. Now

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normally for them to offer this to you, them being your your

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auto insurance or your homeowners insurance company,

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you'll have to have both policies, your auto and your

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home insurance under the same company. I'd say most people

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tend to do this anyway, as it usually figures out to be

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cheaper, but that is often a requirement. Overall, though,

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protecting against catastrophe is what generally comes out to

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be the smartest play. You can survive without the water heater

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protection plan- if it goes south on you kind of you know,

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kind of sucks, not the best, but you can manage. You can't manage

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nearly as well, if you're found liable for a few hundreds, you

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know 1,000s of dollars. So we always want to be having a

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mindset to protect against the catastrophic.

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So for today, a recap is pretty simple. First, recognize that

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your standard coverage may not cover you enough in a liability

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situation resulting from an auto or home related lawsuit. Second,

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thankfully, it is very easy and very cost effective to double or

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even triple this coverage to better protect you. Lastly,

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remember the general protection mindset- insure against the

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catastrophic, what could derail everything you've worked for.

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So thanks very much for tuning in today, remember the new tool

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that we have for this season going forward. The 'ask Joe'

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section on the website enjoy more 30s .com, that's enjoying

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more three zero s .com- ask any questions that you may have. A

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lot of this stuff is confusing and how it may pertain directly

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to you could need some more clarification. So reach out and

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if we can help you, we definitely will. Again, remember

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to please review us and subscribe on Apple podcasts or

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wherever you listen. There are literally millions of young

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American families out there I'm trying to reach and help just

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like you. Clicking a star, writing a review, hitting

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subscribe, all these things help us show up higher in the

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rankings for more people like you to find us and hopefully be

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helped by us. The next episode is titled "36%: The Golden Cash

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Flow Ratio", where we will cover how you can stop wasting

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countless hours budgeting, and find out how much additional you

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may be able to save in 15 minutes or less. As always,

Joseph Okaly:

thanks so much for tuning in today, and I look forward to

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connecting with you again soon.

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The conversations on this show are

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Joe's opinions and provided for general information purposes

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only. They do not constitute accounting, legal tax or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

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any content or information found here first. Joe is affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS securities Inc and TFS advisory services and sec

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registered investment advisor member FINRA/SIPC.

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