Sunday, November 8, 2009

I'm Being Sued - Call My Insurance Company!

Here’s an obvious statement for you; Americans are sue-crazy! How do I know we live in a sue-crazy country? The same way you do – TV, news, commercials…every time you turn around you hear about another crazy lawsuit. There is a lottery mentality in America that makes people believe the best way to get ahead financially is to win the lottery – or a lawsuit.

Do you need protection from all the crazies out there that are filing frivolous lawsuits, that see you as their big pay-day, that are looking to you for an early retirement? YES, YES, AND YES! The good news is that you already have some protection from lawsuits with in your auto and home insurance policies. The better news is that if you don’t have enough coverage, it is a relatively inexpensive problem to fix. But first, a look at the sue-crazy people and why they’re so dangerous to your finances.

Top 10 Video Stories of Crazy Lawsuits:

1. 7-year-old boy sued over minor skiing collision
2. Driver at fault for accident files claim against victim
3. Bike-riding doctor sues roller-blading 11-year-old
4. Volunteer youth baseball coach sued by a 12-year-old player
5. Pool store owners sued over migrating wild goose
6. Drycleaners discuss $54 million pants lawsuit
7. Message board sued for user-posted message
8. Customer sues for refund after using lawnmower all summer
9. Lawsuit over bathroom mirror 2 inches too high
10. Customer misuses product, then sues company that sold it

Top 10 Crazy Lawsuits In Recent News:

1. Convicted Thief Sues Store He Robbed
2. Couple sues neighbor over back-yard smoking
3. Shopper who forgot to pay for pajamas sues Wal-Mart over her arrest
4. Lawyer sues over gym's obese bully
5. Judge Rejects Attempt to Claim Damages for Injuries Horse Lover Suffered on Date
6. Supreme Court to hear gambler's lawsuit
7. Florence women sue Applebee's, Weight Watchers
8. No Joke, Comedian Sued Over Mother-in-Law Humor
9. Mich. lawyer sues, claims mouthwash stained teeth
10. Disparaging eBay comment sparks lawsuit

Liability protection is the part of your auto, home, boat or motorcycle coverage that protects you from lawsuits if you are found to be at-fault (liable) for someone else’s injuries or damage to their property. It makes sense that if you cause the damage, you should be responsible for the repairs, and that is what your insurance is there for…up to a limit.

Every insurance policy has a limit where it will stop paying – the policy limits. But what happens if you cause a 5 car pileup and only have enough coverage to pay for 2 cars? I’ve heard lots of people say “They’ll only sue you up to your policy limits, so keep your coverage low and save the money.” Wow, how does that make sense? Who pays for the other three cars you caused the damage to? YOU DO! Just because you don’t have enough insurance does not mean you’re not responsible, it just means the rest of the money comes out of your pocket!

Most financial experts agree that if you have some assets, you need enough liability coverage to protect those assets from lawsuits. Liz Weston, @lizweston, has written at least 9 articles for MSN Money educating the public about carrying liability limits to protect your assets. Personally, I think you should carry the proper coverage if you fall into the category of folks who DON’T have lots of assets – the category of hoping to have assets in the future. Why? Because most states are tort states that do whatever is necessary to collect judgments against you; can you say wage garnishment? So how DO you protect yourself, and do it at a reasonable cost?

Umbrella insurance is a liability insurance policy that gives you extra protection from lawsuits in all you personally do (hence the name umbrella). Car accident, slander, hunting accident, home injury, water skiing incident – pretty much everything you can be found personally liable for is covered under an umbrella policy.

An umbrella policy is an extension of your other personal insurance policies, so any lawsuits that would be covered under your auto policy, as an example, would also be covered under your umbrella policy. Umbrella insurance typically starts at $1,000,000 worth of coverage and goes up from there. And here’s the best part, even if a lawsuit is frivolous or just plain crazy, you’ll get the protection you need to keep your assets, and your earnings, safe.

Umbrella insurance typically costs around $15 - $20 per month for most folks, well worth the price for the peace of mind. Most companies require certain limits in your auto and home insurance policies before you can buy an insurance policy. Talk to your local insurance agent to find out what your current limits are in case you get sued, and make sure you’re protected from the lawsuit crazed neighbor that sees you as their winning lottery numbers!

By Robert Edgin

This is part 3 of a 4 part series on proper insurance protectionn

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