Imagine this scenario: you win the lottery and start buying the things you’ve always dreamed of. You buy a big beautiful house, a fancy new car, a shiny yacht. You might say to yourself, “Forget insurance: If something happens to my property, I have enough money to replace it.” This may be true, but you probably haven’t considered liability, especially since you’re wealthy and have just become the target of lawsuits, especially frivolous lawsuits. A good general insurance policy would cover this.
Consider this, someone slips on the snow on the front property of your new house. Or someone falls out of your boat. Or he hits a bicyclist while he is driving his car. Or someone who knows you just won the lottery starts a frivolous lawsuit. First, you should have an auto, home, and boat insurance policy to cover liability in these types of situations. But, these types of policies usually only cover you up to a million dollars. But since you just won the lottery, people will know that you’re rich enough to cover a million-dollar-plus lawsuit. That means that, in a successful lawsuit against you, you could be liable for more than $1 million. A good general insurance policy would cover this type of risk.
A general insurance policy is designed to provide you with liability protection on top of what your regular home, auto, and boat insurance policies cover. Typical coverage is anywhere from $1 million to $5 million on top of your usual liability coverage, but it could even go as high as $10 million or more with an insurance company that specializes in high net worth individuals. As a lottery winner, this is probably the best protection you could have for your assets.