Hi everybody! It’s been a while since I reached out to you! As you can imagine, I’ve been very busy handling claims because of the stormy weather we’ve had in Southern California.
One question that I am asked a lot is “how much insurance should I have”? My first answer is that they should talk to their insurance agent who is equipped to talk about the different types of insurance and can put together a nice insurance program based on their needs. But people still want to know how much insurance I think they should have as somebody who handles thousands of claims every year.
Well, that’s a tough question and not an easy one to answer because everybody’s situation and needs are different. I start the conversation by saying that they need to protect everything they have. They have worked hard to earn what they have so their personal property should be protected.
I like to use real life examples without violating anybody’s privacy. For example, I would say “Bill, let’s say you were almost home from work and driving through your neighborhood when suddenly a child chasing a ball darted out in front of your car and you accidently run the child over. After being on a ventilator for six months, the child passes away or worse (financially), the child survives but needs to be hooked up to machines in a vegetative state for the rest of his life”. I know that this is a horrible story but one that actually happened! Bill, how much money do you think you will be sued for?
As a claims adjustor, I know the answer to this. A trial lawyer will sue you for everything you have or will have the rest of your life. Let’s say that the trial lawyer obtains a judgment for the grieving parents of four million dollars for the sake of argument. To satisfy the judgment, they will go after all of your assets which includes money in your bank account, money in your business account if you are a sole proprietor, the equity in your home and any rental properties, retirement assets, and your largest asset, your earnings power. 25% of your wages can be attached for 10 years to satisfy a judgment, then after 10 years, they’ll renew the attachment for another 10 years until the judgment is paid in full. So this means that you can lose everything you have plus 25% of all future earnings for up to 20 years.
I hate to be a Debbie Downer here but insurance is all about you making small payments to avoid having to make a massive payment and possibly lose everything you have. Think of it this way; you put out a bunch of small manageable campfires to avoid the entire forest from burning down. Until next time, thanks for listening.
Review your policy with one of our agents today. Call Ken May Insurance Services at (760) 893-8055 for more information on California auto insurance.