While liability car insurance will pay for damage that you cause to other people and their property, if you do not have enough coverage, you could have no choice but to hand everything over in a lawsuit case. That includes your retirement. Nathan Mahlik, a State Farm agency owner in Danville, California, told people that if they do not have enough liability coverage, they will have to risk their future wages and assets. Does that seem worth it to you?
What retirement plans could be at risk? First, the Employee Retirement Income Security Act ensures that creditors cannot gain access to certain plans. This includes both the 401(k)s and pensions. However, if you have a certain type of IRA or a different type of retirement plan, you may not have the same protection. Traditional IRAs will have protection up to an extent across all 50 states, but in Georgia and California, you may have part of your IRA withdrawn for the satisfaction of a judgment.
If you have a Roth IRA, it will not be protected in Georgia or the following states:
How much car insurance do you need for protection? The state minimum required for auto insurance will often not cover everything. For example, Florida's state auto insurance minimum sits at $20,000 for injury and $10,000 in property damage. If you have that type of minimum, it will quickly add up. In some cases, a large reward can push up to $351,829. Doing the minimum level of coverage can become a huge mistake. To reduce this problem, it becomes a great idea to carry liability coverage that will at least cover your net worth. In doing that, you protect yourself from a large judgment against you.
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