How to Protect Your Assets in the Event of a Car Accident
Protecting your assets in the event of a car accident means being prepared for the worst.
It is best to have protection to care for yourself and your family before getting 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, and by that time, it’s usually too late.
A good offense is your best defense. Different insurance policies will vary depending on your family’s needs.
In the article below, we will look at how you can protect your assets.
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Setting Up Insurance Policies
Make sure you have adequate insurance. Many people have car insurance and renter or homeowners insurance, but there are many more insurance options out there that may be in your best interest.
For instance, are your children with a driver’s license actually on your policy?
Check your policy before you hand over the keys. That goes for your kids, friends, or family members. Another necessary automobile coverage that people overlook is business use. Read your policy clearly before letting anyone drive your car.
With homeowners insurance, you need to check for details. For instance, if your policy for fallen trees covers trees from your property or 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 your toilet overflowing and ruining your neighbor’s assets?
3 Ways to Protect Your Assets
Here are a few things to look closely at to protect your assets in the event of a car accident:
- Title of the Car
- Umbrella Liability Coverage
- Strategically title all of your assets
Who Needs To Be On The Car Title?
Car titles need put in the name of the person who owns and drives the car most often.
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 gets sued and damages go beyond the insurance coverage amount, their assets, your joint assets, and your individual assets are all at risk.
If your spouse got into a car wreck with the title in their name, only their assets and your joint assets would be at risk.
Kids are another story. As minors, you are responsible for them. However, on their 18th birthday, you need to switch the car title over to their name.
You can sell or gift the car over to them. You can also share the title, but both parties are responsible.
Related Post: Most dangerous cars of all time.
What Is An Umbrella Policy?
An umbrella policy is an additional liability insurance policy that can provide additional liability coverage above the 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:
- Damaged Property
- Certain Lawsuits
- Personal Liability Situations
What Does It Mean To Strategically Title Your Assets?
Strategically titling your assets means ensuring your assets have the right type of title to protect you.
Married couples can use this type of title to protect their assets. If your spouse gets into trouble, your shared assets are not at risk, and vice versa.
If you get into trouble, such as being at fault for an accident, then your spouse is not in jeopardy of losing joint assets.
Other avenues to help protect your assets are:
- Form a trust to hold your assets- If you are in an accident, you want a power of attorney (healthcare and financial). These documents allow someone else to act on your behalf while you are alive. A trust or will governs when you die. Each serves a purpose and should be tailored to the client’s situation. It is best to sit down with a licensed attorney to decide if a trust and power of attorney are right for you.
- Contribute to a retirement account- Some plans have unlimited protection from creditors. Check into your plan and verify the ERISA governs it. This can further protect your assets if you are at fault for an accident. Confirm you are set up for any unfortunate situation—asset protection matters.
To learn more about asset protection, contact The Brown Firm for a free consultation following an auto accident.
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