As you travel to work each day, your thoughts may not be on the risks of life lurking in the shadows. You may have tried to mitigate the risks through your auto and homeowner’s insurance policies, but what could happen to your nest egg you have worked hard for if you are sued? Will your current liability insurance coverage from your auto or homeowner’s policy be enough to pay any damages awarded? More than likely not, hence the need for an umbrella liability policy.

What is an umbrella liability policy? It’s a type of insurance designed to add extra liability coverage over and above your home and auto policies. The extra liability is usually purchased in increments of a million dollars.  The policy is designed to protect not only yourself but also the other members of your household.  It covers a wide variety of things such as: 

Items Typically Covered  Items Typically Not Covered 
Bodily injury Personal belongings
Personal injury Business losses
Property damage Intentional or criminal acts or omissions
Landlord liability Written or oral contracts

How does it work? Let’s use a common example of an auto accident. The accident was found to be the fault of yourself or someone in your household.  Your auto policy has liability coverage of $100,000. However, you are sued as a result of the accident and the court has awarded a $1 million dollar settlement for the pain and suffering of the injured party.  Thankfully, you have a $1 million dollar umbrella policy in place.  Here’s how the pieces would fit together: 

  1. You would pay your auto policy deductible. Let’s say it’s $1,000. 
  2. Your auto policy would pay the next $99,000. 
  3. Your umbrella policy would the remaining $900,000. (There is not usually a separate deductible for these.)

If you didn’t have the $1 million dollar umbrella policy, then the $900,000 over an above your auto policy’s limit of $100,000 would have to be paid from your personal accounts, whether bank or investment accounts, which could potentially wipe out your entire life savings.  

Umbrella policies are usually quite inexpensive.  They typically run anywhere from $150-$300 per year for $1 million of coverage. You should talk to your current auto and home insurance providers to see what they offer and compare that to other companies.  For  more information and examples, click HERE

If you have additional questions or would like to discuss how this would affect your situation, please let us know. Part of our comprehensive financial planning is to ensure our clients have their risks covered. We have Lockheed Martin specialists standing by and ready to assist.  Give us a call today at 817-210-3444 or click HERE to book a complimentary consultation.

For more tips like these, click here to sign up for our weekly email blog newsletter. If you would like to get better educated on Lockheed retirement strategies, click here to download our Free Report titled Retire with Confidence: The Top 4 Things You Can Do Now to Maximize your Lockheed Retirement. And, if you want to have face time with a Lockheed Retirement Specialist², you can click here to schedule an appointmentclick here to sign up for our Lockheed Retirement Workshop or click here to just give us a call (817) 210-3444.

Be sure and check back next week for more incredibly valuable information. Cheers!


Financial Planning and Investment Advisory offered by SWMG, LLC a Registered Investment Advisor.

This blog is being provided and sponsored by Strittmatter Wealth Management Group, LLC. Lockheed Martin and its subsidiaries do not endorse, recommend, or make representations with respect to any information, advice, services, or products discussed in this blog. 

Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.

Our Complementary consultation and free report are for informational purposes only and provided free without any obligation to utilize or retain our investment advisory services.

SMWG, LLC is not affiliated with or endorsed by Lockheed Martin Corporation. Our expertise comes from working with LMT employees for several years and helping them to retire with confidence.

Investing involves the risk of loss, including loss of principal. Past performance does not guarantee future results. Investment products are not FDIC insured, have no bank guarantee, and may gain or lose value. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable for a client’s investment portfolio.