How to Protect Your Assets in the Event of a Car Accident
First off you always need to be prepared for the worst. This means you have protection to care for you and your family before you ever get in an accident.
Changing titles and other ownership of assets after an accident is not always a good idea. There are records of dates of changes so by that time it is usually too late.
A good offense is your best defense. There are different insurance policies that will vary depending on your family’s needs.
Table Of Contents
- Setting Up Insurance Policies
- Protect Your Assets
- What Is A Car Title
- Who Needs To Be On A Car Title
- What Is An Umbrella Policy
- Changing Your Umbrella Policy
- What Does it Mean to Strategically Title Your Assets?
Setting up Insurance Policies for Your Best Interest
You may have car insurance and renter or homeowners insurance, but there are many more insurance options out there that may be in your best interest. Make sure you have adequate insurance.
What this means is that your insurance is set up for how you are using it.
For instance are your children with license actually on your policy? Check your policy before you hand over the keys. That goes for kids, friends, or family members.
Another important automobile cover that people overlook is business use. Read your policy clearly before letting anyone drive your car.
With homeowners insurance, you need to check if your policy over fallen treen not just to your house but also your neighbors.
Does your homeowner's insurance cover your dog biting someone, someone falling on your icy porch, your kid's baseball shattering a neighbors window, or toilet overflowing and ruining your neighbor's assets?
3 Ways to Protect Your Assets
Here are a few things to look closely at in order to protect your assets in the event of a car accident:
- Title of the Car
- Umbrella Liability Coverage
- Strategically title all of you assets
What is a Car Title?
A car title is a legal form that establishes who owns the car. It is also known as a pink slip. If you own your car you should have a certified paper from the DMV that states you own your car.
If you are still making payment often time the lender will hold the title as collateral but you can still drive the car and take care of it. Once you are finished paying off your car then the title will be yours. If you are leasing your car then the leasing company will have the title to the car you are leasing.
Who Needs to be on the Car Title?
Titles of cars need to be put in name of the person who owns and is driving the car. If your spouse is driving your car and gets in an accident you both are liable because the car title is in your name.
Therefore if your spouse is sued and it goes beyond the insurance coverage amount than his assets, joint assets and now your individual assets are all at risk.
Whereas if your spouse was driving their vehicle with the title in their name then in the event of a car wreck only their assets and joint assets would be at risk.
Kids are another story, as minors you are responsible for them. However on their 18 birthday after you sing and have some cake you need to switch the car title over to their name. You can gift or sell the car over to them. You can share the title but you are still responsible just now they are too.
Now let's take a look at your umbrella policy.
What is an Umbrella Policy?
It is an extra liability insurance policy. This way you have major claims or you get sued this policy will help protect your assets and your future.
An umbrella policy can provide additional liability coverage above your limits of your homeowners or auto insurance. It will kick in once you have exhausted the other insurance policies. It can also provide coverage for claims that may be excluded by other liability policies.
Here is what an umbrella insurance policy generally covers:
- Damage property
- Certain Lawsuits
- Personal Liability situations
Changing your Umbrella Policy
Sometimes it is advised to change your umbrella policy. Most of the time people change this policy when their children begin to drive. You are held responsible for their actions.
If you are going out on a limb and letting a relative drive your car for some time, maybe while their car is being fixed, it might be a good time to up this policy to give you more coverage.
Any type of situation where there is more of a risk that you may be held responsible for someone else's actions it is a good idea to change this policy your favor.
What Does it Mean to Strategically Title Your Assets?
This means you need to make sure your assets have the right type of title that will protect you. Some states all for “tenants by the entirety” this is for joint ownership. Married couples can use this type of title to protect their assets therefore if your spouse gets in trouble your assets that your share are not at risk, and same go for you. If you get in trouble such as being at fault for an accident then your spouse is not in jeopardy to lose joint assets.
Other avenues to help protect you assets are:
- Form a Trust to hold your assets : It is where you turn over your control of your assets. These are then held for the benefit of a beneficiary. There are different types of trust so it is best to sit down with a license attorney to decide if a trust is good for you and what type of trust you would need.
- Contribute to a retirement account: Some plans have unlimited protection from creditors. Check into you plan make sure it is governed by the ERISA.
All of this can help when it comes to protecting your assets if you are at fault for an accident. Make sure you are set up for any unfortunate situation. Asset protection matters.
If you need help after an auto accident contact The Brown Firm for a free consultation.