Q: I am trying to determine how much personal liability umbrella insurance to have in Colorado.
In my research, I believe that my and my spouse's IRA and Roth IRA accounts are protected. However, are our SEP and HSA accounts as well as our personal residence also protected?
My opinion: This is a personal question that, like other insurance questions, comes down to your tolerance for risk. Generally, it's good to also consider other assets, including earning capacity. A lawyer or a doctor likely has a higher earning capacity than a McDonalds window employee or a barista. Those with higher earning capacities may want more insurance coverage to avoid having a judgment that would garnish their earnings. Conversely, someone with low earning capacity who likely spends all their money every month on rent and food and lives in a rental with a roommate is less likely to be sued by a lawyer who knows they're "judgment-proof." Even so, that person might want renters insurance and even an umbrella policy to avoid having to pay a judgment or having wages garnished if a lawyer did sue them.
However, this is not legal advice. Again, it's a personal question that comes down to your risk-tolerance.
Tim Akpinar agrees with this answer
A: It could be difficult to predict what an aggressive and determined plaintiff would choose to pursue - depending on what theory they might present in a given lawsuit. A starting point could be to consult with an insurance professional to get a handle on premiums for different scopes and levels of coverage - which could make for a more meaningful consult with an attorney versed in asset protection. Good luck
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