Protecting Assets as Young Professionals

You just graduated and landed a job. Congrats! Did you know that, before you receive the first paycheck, you already have assets worth protecting? You may wonder, hey, I don’t own any real estate, my car is a piece of beaten-up junk, and my bank account balance is zero. If I hurt someone in a car accident, what can they take away from me anyway? Do I really need to carry good coverage other than the state-mandated minimum?

Well, the surprise is called “wage garnishment”. In California, up to 25% of income may be garnished by court order. If your Bodily Injury Liability coverage is exhausted, the remaining liability doesn’t automatically disappear even if you have no asset. The injured party could come after your future income. So don’t incorrectly assume you don’t need good liability coverage even if you currently have no asset.

Your future is worth protecting too. If you would like to save money on auto insurance, it is important to differentiate what coverages are vital and what are merely convenience. You can boost your liability coverage while saving money by cutting out the convenience coverages. Now that is a smart new grad!