ASK DAVE

Insurance

Umbrella Policy

Dear Dave,

I follow you on Twitter, and I was wondering if you recommend buying an umbrella policy. If so, how much?

—Dean

Dear Dean,

If you’ve started to win with money and build some wealth, an umbrella policy is some of the cheapest insurance you can buy. It’s just about the biggest bang for your buck.

Here’s an example. In most states, you can get an extra $1 million in liability coverage added to your car insurance and homeowners insurance as an umbrella policy for as little as $200 a year.

There’s no problem if you don’t have any money. But if you’ve got some cash, and you bump into somebody, it’s a really good thing to have that extra umbrella insurance policy in liability situations!

—

Dave

DROP THE ARROGANCE!

Dear Dave,

My son is in his 30s and has been married for seven years to a girl from a wealthy family. Her parents provided them with a lot of financial support over the years, but now they’re getting divorced and he has come to us for the money to make this happen. On top of all this, when we ask him why he doesn’t have the money, he tells us it’s none of our business. We don’t like his attitude, but we’re not sure what to do.

—Dee

Dear Dee,

This is a grown man we’re talking about, and if he’s going to take on the lifestyle and actions of an adult, he needs to act like one and take care of his responsibilities. I understand he’s your son and he’s hurting right now. Still, it takes a ton of arrogance to beg money from someone and tell them the reason they don’t have it is not their business.

If he seriously wants to get into some financial counseling and start becoming accountable for his money — to himself and to you — then you might consider helping him out financially. But at this point, you’re giving a drunk a drink if you just hand him money because he wants it. Anyone can make a mistake, Dee. But it’s not your job to fund his irresponsible behavior or his arrogance!

—Dave

IF YOUR ADULT SON OR DAUGHTER ASKS FOR MONEY, HERE ARE OTHER THINGS YOU CAN DO INSTEAD OF WRITING A CHECK.

• Consider allowing your child to move into your home until finances improve.

• Temporarily provide childcare to reduce living costs.

• Provide encouragement and support while letting your child know these tough times will pass.

• Refer your child to financial counseling.

SOURCE: dailyfinance.com/2013/07/05/umbrella-insurance-policies-extra-protection/