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  • Post last modified:July 2, 2020

Definition of Asset Protection Insurance

It’s always best to have a backup plan in a world full of uncertainties and Asset Protection Insurance is the exact contingency plan. What do you think I mean by this? You don’t know? Now read on to find out

Asset Protection Insurance is self explanatory in a sense. It’s designed to protect your assets. From your real estate (most especially your home), car, etc, among other things considered as assets are included in an asset protection insurance policy for protection purpose against legal actions.

The Asset Protection Insurance is there to cover the gap between the present market value and the original invoice price of the property against unforseen events. When a legal judgement overcomes an existing insurance coverage, this type of policy helps to protect your property.

Depending on the kind and level of legal asset protection you want, there are different types of insurance available.

UMBRELLA INSURANCE

It’s important you obtain an umbrella insurance when considering the different types of personal insurance that you need. Your assets will be at risk should you be faced with a lawsuit. These assets that may be at risk includes some possessions, investments, financial accounts and liability coverage on your homeowners or auto insurance.

The best way to have protection over your asset(s) is through a personal umbrella insurance. Even if there are other policies to purchase liability coverage for your assets, it may not be enough liability coverage to protect your asset.

I guess you don’t have a good definition for your personal asset. Ah ah, I can imagine how your look changed in reading that guess. Read below for the definition

What Do You Consider Your Personal Assets?

Your personal assets consist of the following; real estate, financial and investment accounts. These make up your wealth also known as your net worth. Some individuals have a much larger portfolio to their name.

If these assets of yours aren’t protected well with the right personal umbrella insurance, then it’s under great risk. Most persons don’t realize on time how risky it is not to have their assets under such protection.

Even those with high net worth believe falsely that their assets are protected under their other personal insurance policies, and end up discovering too late that it isn’t

Definition of Umbrella Insurance?

This is an insurance that ensures all forms of gaps in your homeowners or auto policies that could leave your assets vulnerable and subject to seizure is covered. It provides additional liability protection just in case of a lawsuit when other liabilities coverage of your other policies are exhausted

Personal umbrella insurance protects your assets up to the amount of coverage you purchase, so that you won’t be forced to give up your assets in the event of lawsuits.

Who Needs Personal Umbrella Insurance?

I’m quite sure that you won’t want to work so hard to acquire assets and make it subject to risk.

Personal insurance that includes an umbrella insurance is recommended for you for a guaranteed protection over your assets. This kind of protection is necessary even if you’ve just your home as your asset, it will prevent you from losing it in a liability lawsuit.

This is even more necessary when you’ve substantial amount of assets. In most cases, people are more willing nowadays to file lawsuits against those they view as being wealthy and better able to afford to pay for damages.

With these considerations, it’s advisable for anyone who has wealth to obtain enough personal umbrella insurance to protect all assets and prevent the possibility of assets seizure.

Most of the supplemental policies are written to provide coverage of between $1 million to $5 million and can be purchased from most agencies who write homeowners and auto insurance.

Your portfolio can include lots of asset types, which may consist of real estate, investment accounts, and also expensive antique jewelry. You surely won’t want it seized to pay for a liability lawsuit judgement if your personal insurance coverage is insufficient. Ensure your wealth is sufficiently covered by purchasing umbrella insurance to protect your assets beyond the coverage provided by other policies.

You will have peace of mind that your assets are secure even when you’re financially responsible for damages to other parties that would have otherwise lead to your assets seizure.

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Guaranteed Asset Protection (GAP)

This policy is designed to cover the difference between your car’s actual cash value and the amount that you owe to the lending institution. It’s mostly needed when you need to cover the loan on a watercraft, a car or any other type of recreational vehicle.

Life Insurance

It isn’t an asset protection insurance but mainly to secure some degree of financial security for your loved ones in case you pass away. This protects the family of the deceased against debts and other expenses that might be too overwhelming. It protects them from been held down if they are faced with debt challenges as a result of your passing.

Business Liability Insurance

You’ve lots of responsibilities and accountability when operating a small business. Even if you care most for your customers and provide the best quality experience for them, an accident can happen that will render all your efforts useless.

So, you need to ask yourself the question. Is my business protected with liability insurance? If yes, then great. But if no, then you’re at risk of losing your business and personal assets.

Who Needs Business Liability Insurance?

We live in a world of uncertainties and so you need it. Research states, as of the time of this write-up, that annual premiums range between $750 to $2000 depending on the business niche and the coverage needs. That’s far less than the hundreds of thousands or millions needed to challenge a lawsuit.

You can purchase a general liability insurance separately, though it can be included as part of a Business Owner’s Policy (BOP) which includes liability and property insurance into one policy.

Check your (BOP) to see the limitations of your liability coverage. In most cases you will observe that it’s low, and so you need additional coverage through a separate policy.

Is General Liability Insurance Needed By an LLC?

You can be held liable for your work role at your limited liability company. You might not receive protection if;

  • Someone is injured personally by you
  • A business loan or debt is personally guaranteed by you
  • You don’t properly manage your business taxes
  • You have acted in an irresponsible or illegal manner
  • You mix business and personal accounts or expenses, instead of treating your company as a separate business entity.

Types of Business Liability Insurance

There are several types which includes;

i. General Liability Insurance

To protect your business from injury claims, property damages and advertising claims, this is the perfect form of business liability insurance. Also known as Commercial General Liability (CGL), it may be the only type of business liability insurance you need, depending on the situation of things in the business.

The policy will clearly state out the maximum sum the insurance company will pay against a liability claim. For example, if your business gets sued for $400,000 for medical cost damages linked with an injury caused by a work hazard, plus an additional legal fee of $200,000 but your coverage maxes out at $500,000, then you’re responsible for paying the difference of $100,000.

Make sure to be proactive by calculating in advance all possible risks you may encounter and therefore select the coverage that will protect you.

ii. Professional Liability Insurance

Your business will need professional liability insurance (errors and omissions). Through this coverage your business is protected against malpractice, errors, omissions, and negligence.

Depending on your profession, or maybe also for individual contract, it most likely will be a legal requirement to have such a policy. For example, Doctors and other Medical practitioners require coverage to practice in some states. Technology consultants also need coverage for independent contract work.

iii. Product Liability Insurance

There should be protection especially for small businesses that are selling or manufacturing products, in cases were someone gets injured from using the product.

The amount of coverage needed due to the level of risk depends on your business type. A retailer of fans will face more risk than a retailer of pencils.

I know you’ll have questions in mind such as;

Advantages of Acquiring Asset Protection Insurance?

The advantages include

  • You will be adequately covered.
  • It provides protection in the case of a lawsuit.
  • What you worked so hard for won’t be at risk.
  • You’ll have total asset protection insurance. Meaning that you’ll get what you paid for your property.
  • You’ll have peace of mind.
  • Protection for your investment.

Whatever asset of yours that you want to protect against legal actions, wether it’s your car, home or a substantial amount of wealth, it’s better to be safe.

If you aren’t sure on how to go about using insurance to safeguard your assets, or which type of insurance to use, then it’s best you seek the advice of specialized lawyers to help you decide which type of asset protection insurance policy works best for your particular case

INSURANCE MARKET RESEARCH REPORTS, ANALYSIS & TRENDS

Insurance companies operate by selling, insuring properties, life, assets, valuable items, and many solid or virtual properties that hold a certain value that drives income or returns in the future. ‘

Premium: A regular fee that you’re going to be paying to the insurance firms either monthly, quarterly or annually in exchange for their promise to protect you financially in the nearest future.

The insurance industry is run by insurance firms that sell insurance policies to customers in return of monthly, quarterly or yearly based premiums that are used by the companies to invest or do business for sometime.

These companies have under written policies for different areas which includes casualty, liability, life, property and other risk categories.

It’s usually defined as the insurance that’s been taken care of and the process is known as managing risk or risk management process.

With many brands in different industries operating with valuable resources(assets), the idea that values can be derived from the resources for various advantages and benefits and also for the asset protection, then it’s necessary.

These brands always aim at marketing plans that are intriguing to their audience, therefore they tend to ensure that they gain a lot from their ad campaigns.

On a global scale, the most required form of insurance are from the health and medical sector, which are offered by employers/organizations to their employees.

Due to the current global economic hardship, this area of insurance is currently undergoing a great debate as brands are looking for plans that fit their workforce and the employees have knowledge of costs and coverage, so the employers or business owners and employees or consumers are not considering premiums, but co-payments and also prescription coverage when it comes to choosing a plan.

This assists the employers and business owners to plan the finances and also maintain the essence and priority of providing healthcare and insurance for their employee.

INSURANCE INDUSTRY CURRENT TRENDS

Studies by MarketLine states that the global health and life insurance market generated over $2.9 trillion in 2010, as the market has experience steady revenue growth of 4.5% on an annual basis between 2006 and 2010. It’s further estimates also predicts an optimistic future growth that’s expected to be at a yearly rate of 7% until the end of 2015 to reach the revenue generation of over $4.1 trillion.

Life insurance segment of the industry shares majority of this complete revenue, which has generated over 90% of the overall market with approximately $2.56 trillion.

Recently, the industry’s growth is not as aggressive as it was estimated to be, mostly due to few factors that are affecting and making positive effects.

The regulations of the insurance industry are placing greater emphasis and importance on governance, compliance and risk transparency causing insurance companies to increase their investments in enterprise risk management frameworks.

The global motor insurance industry is moving across demographics and new entrants are gradually getting a good part of the market with customers increasingly purchasing newer vehicles, so the market is expected to be worth over $614 billion by the end of 2015, which is a major increase in the five year period, as of 2010 it was estimated to be $525 billion. The personal insurance represents approximately 80% of the entire global market, and the US makes up about 45% of the market.

With the major and important roles played by technology in connectivity, expansion, analysis and tools to measure the large data quantities and calculation, the insurers are leveraging business intelligence strategies in using “Big Data” to help estimate claims, assets, credit and market data, and gain more insights across networks of producers, policyholders and operations.

How To Make Use Of Insurance To Effectively Protect Your Assets [+Market Analysis About The Industry]
Feel free to use this infographic as you like

Conclusion

Insurance asset protection is a necessity for all those who want to ensure their property and business assets that they have worked hard to acquire is protected.

All details about how you can use insurance to protect your assets are have been outlined above.

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