Do you have an umbrella policy?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
User avatar
F150HD
Posts: 836
Joined: Fri Sep 18, 2015 7:49 pm

Do you have an umbrella policy?

Postby F150HD » Sat Apr 15, 2017 9:28 am

At home, not talking for a business etc. Do you have one? They say you don't have to be a millionaire to be sued like one & if sued one could be forced to liquidate personal assets to cover the outcome etc.

I currently do not but am kicking one around. Am reading one should carry $1-2M in coverage? what ballpark is this costing you if you have it? Read rough estimates of $150-$200 per year. (clearly the cost would vary per region)

Also, if one has an umbrella does it extend to all your insurance policies?
even if you have them from 2 different companies?
(my primary insurer doesn't cover motorcycles so separate company/policy for they cycle)

http://articles.chicagotribune.com/2014-03-20/business/sc-cons-0320-invest-20140320_1_health-insurance-homeowners-insurance-insurance-coverage

This snip from another site got me more seriously thinking about it:

To better understand how a personal umbrella policy works, here's an example: If you're at fault in a car accident that injures another driver, your regular automobile insurance may cover the other driver up to the limit you selected, say $250,000. But what happens if that limit is not enough to cover the other driver's resulting medical bills?

If the other driver's injuries are severe, you may be legally responsible for damages beyond the $250,000 your car insurance policy covers. And, if he sues you, your personal assets could be at stake. Imagine if that injured driver were a surgeon or another highly paid professional. What if the accident you caused resulted in an injury that kept him from doing his job for six months? Suddenly, he's suing you for $1 million to cover the six months he's away from work.

imabeliever
Posts: 103
Joined: Sat May 28, 2016 2:45 pm

Re: Do you have an umbrella policy?

Postby imabeliever » Sat Apr 15, 2017 9:43 am

Yes I have an umbrella policy. I have a pool, a dog, and guns. For a very little monthly expense, it's a huge fail safe policy in the event normal insurance (ie home owners) doesn't protect me. Of course, even better is not to ever use it ...knock on wood, so far so good.
yes you can do this!

MikeG62
Posts: 389
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Do you have an umbrella policy?

Postby MikeG62 » Sat Apr 15, 2017 9:48 am

Yes I have a $5 million personal liability umbrella policy. Cost is around $1,100 per year. It sits over the top of both my auto and homeowners insurance policies.

True story. Brother-in-law's aunt was killed in auto accident (her husdand was badly injured but eventually recovered). They were hit from behind at a stop light by a distracted driver. Family sued and case was settled before final jury decision for $5 million. $4 million went to surviving spouse (pain and suffering and loss of spouse) and $1 million to only child (loss of mother). The women who died was a retired college professor. Imagine what the award might have been had it involved a young high earning doctor or lawyer or Wall Street type with a stay at home wife and young children?

I'd get as much insurance as you obtain at a reasonable cost.

After learning of this (was a few years ago) I inquired about increasing my coverage. Next tier was $10 million and cost was over $3,000 per year. I declined. Insurance agent I spoke with said they had never personally seen anyone approved for more than $5 million before (and consequently never personally seen anyone who opted for that level of coverage).
Last edited by MikeG62 on Sat Apr 15, 2017 9:59 am, edited 2 times in total.

neilpilot
Posts: 664
Joined: Fri Dec 04, 2015 1:46 pm
Location: Memphis area

Re: Do you have an umbrella policy?

Postby neilpilot » Sat Apr 15, 2017 9:49 am

Even if you have little assets to protect, a judgement can be placed against your future earnings. I have different carriers for my home and autos, and the umbrella coverage is with my auto company (GEICO). Covers my pontoon boat and 2 dogs. Excludes my airplane.

User avatar
TomatoTomahto
Posts: 6161
Joined: Mon Apr 11, 2011 1:48 pm

Re: Do you have an umbrella policy?

Postby TomatoTomahto » Sat Apr 15, 2017 9:50 am

Yes. $5M. It's inexpensive. In NJ, personal injury is a profession, or perhaps a winnIng lottery ticket. If it comes to that, I will appreciate having Chubb's lawyers on my side.

quantAndHold
Posts: 911
Joined: Thu Sep 17, 2015 10:39 pm

Re: Do you have an umbrella policy?

Postby quantAndHold » Sat Apr 15, 2017 10:51 am

Yes. $2M, but my net worth just took an unexpected jump, so I'm thinking of increasing it. We have homes, cars, and umbrella all with the same company. I don't remember exactly how much the umbrella policy costs by itself, but when we added umbrella, to total cost for everything went down. Keep in mind that you need to insure your future earnings, not just your present net worth.

I have three different friends that have needed an umbrella policy. Two had it. One didn't. All three situations were bullsh*t lawsuits over minor car accidents, that should never have gone to court. The whole thing was MUCH more expensive and troublesome for the people who didn't have the umbrella policy than for the people who did.

User avatar
EATaxGuy
Posts: 104
Joined: Mon Apr 10, 2017 12:56 pm

Re: Do you have an umbrella policy?

Postby EATaxGuy » Sat Apr 15, 2017 12:35 pm

imabeliever wrote: Of course, even better is not to ever use it

Isn't that true for all insurance? I don't recall ever buying an insurance policy and hoping to get to use it right away. :)
You may have been handed a cactus, but sitting on it is up to you.

User avatar
yatesd
Posts: 469
Joined: Sun Nov 03, 2013 8:19 am
Location: MD

Re: Do you have an umbrella policy?

Postby yatesd » Sat Apr 15, 2017 12:50 pm

I bought my first umbrella policy about 3-years ago. I just got $1M and believe it costs around $155 a year. I have homeowners and car insurance with the same company.

- Why did I get it? I didn't want someone to see a fancy car, or a fancy title, and sue me. Maryland seems like it would attract people with these intentions.
- Why didn't I get more...I'm not rich, and I hate insurance. This was the right amount for me.

Loik098
Posts: 412
Joined: Mon May 30, 2016 9:29 pm

Re: Do you have an umbrella policy?

Postby Loik098 » Sat Apr 15, 2017 1:22 pm

I don't believe there is any excuse NOT to carry an umbrella policy if you are relatively young and have exposed assets and future wages to protect. It's too cheap not to.

Quoting you an estimate means nothing, because as you said, geography plays a role, as does your personal accident history, the type of house/cars you own, the activities you engage in, etc. It'd be best for you to reach out to multiple companies at least once a year and get a quote for all of them. I'm willing to bet that you can do better than having separate policies with different companies.

goingup
Posts: 2495
Joined: Tue Jan 26, 2010 1:02 pm

Re: Do you have an umbrella policy?

Postby goingup » Sat Apr 15, 2017 1:34 pm

Loik098 wrote:I don't believe there is any excuse NOT to carry an umbrella policy if you are relatively young and have exposed assets and future wages to protect. It's too cheap not to.

I'm not sure age has anything to do with it. I'm relatively old with assets to protect. We have $1m umbrella which will combine with $1m auto policies if necessary.

Mudpuppy
Posts: 5062
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: Do you have an umbrella policy?

Postby Mudpuppy » Sat Apr 15, 2017 1:47 pm

For most people without major liability risks, a $1-2 million umbrella policy will work out to be about $10-25 a month. That's less than a cell phone bill, a few lattes at Starbucks, cable TV, and many other things people don't bat an eye over paying for on a monthly basis. So why wouldn't you get a policy to have the protection in case you are sued?

investingdad
Posts: 1127
Joined: Fri Mar 15, 2013 10:41 pm

Re: Do you have an umbrella policy?

Postby investingdad » Sat Apr 15, 2017 1:51 pm

We carry five million, it's not that expensive.

Total peace of.mind.

1reason2live4
Posts: 1
Joined: Sun Aug 09, 2015 12:45 pm
Location: Seattle

Re: Do you have an umbrella policy?

Postby 1reason2live4 » Sat Apr 15, 2017 2:06 pm

We carry a $2m policy...plus $500k auto liability so that about covers us for our current situation. As our net worth increases so will our umbrella policy.
Don't cry because it's over; smile that it happened.

goldendad
Posts: 179
Joined: Tue Apr 10, 2012 10:29 pm

Re: Do you have an umbrella policy?

Postby goldendad » Sat Apr 15, 2017 2:30 pm

Yes. I carry 5 million.

Iridium
Posts: 67
Joined: Thu May 19, 2016 10:49 am

Re: Do you have an umbrella policy?

Postby Iridium » Sat Apr 15, 2017 5:12 pm

I have a million of umbrella. It cost $160/year for one residence and one car.

A couple benefits of the umbrella other than the high limits:

1. I only need to worry about one (smallish) document to understand my liability coverage. Without an umbrella, I have to understand my auto policy and my condo policy, and which one comes into force for which occurrences in order to fully understand my liability coverage. With an umbrella, I only need to understand the umbrella policy and ensure that they accept the underlying coverage. I don't need to bother reading through the liability sections of the auto and condo insurance anymore because if my umbrella covers the situation, then I am covered (with at worst a $1000 deductible); the details of which policy kicks in, when becomes a trivial detail.

2. Umbrellas usually offer broader coverage than homeowner's and auto. For example, the latter are pretty much always limited to the US and Canada, whereas my umbrella offers worldwide coverage (the only caveat being that I must purchase underlying coverage in Mexico; everywhere else, it covers me even without underlying coverage). My umbrella also explicitly states that it would protect me if someone sued me as a board member of a non-profit (particularly interesting in my case, as I am president of an unincorporated non-profit). There are usually also fewer exclusions in the coverage, although I don't remember any sticking out when I compared my policies side by side.

One bad thing about umbrellas is that they are not a fully standardized product as home and auto insurance are. So, what they cover and their exclusions can vary considerably from insurance company to insurance company. None of the companies I called for a quote proactively offered the umbrella insurance contract (in fact they seemed to be a bit surprised when I asked), but every single one was able to easily email me one. The other bad thing is that so few people get them and they are so cheap that no company does anything online with them. Expect to have to call in order to get quotes and further information.

As far as an umbrella covering over multiple company's underlying, I think it is fairly standard for companies that issue the umbrella to also require that your auto be through them, but allow a different company to provide your homeowners (about 85% of umbrella payouts are related to auto). I'm really not sure how it would work with two different 'auto' companies. Heck, I don't even understand how it works without the umbrella: it feels like you would be getting double-covered for situations like rentals. Are you sure it wouldn't be cheaper (not to mention easier) to put everything under the motorcycle insurer? There are a few companies that will do just an umbrella for you, although their rates tend to be higher (if you go down that route, your best bet would be to contact an independent insurance agent who can run a price comparison for you, as well as contact the underwriter to ensure that all of the underlying coverage is acceptable).

spammagnet
Posts: 582
Joined: Wed Apr 27, 2016 9:42 pm

Re: Do you have an umbrella policy?

Postby spammagnet » Sat Apr 15, 2017 5:18 pm

This thread reminded me that we planned to buy umbrella coverage. I just did, $1 million coverage from GEICO for <$500/yr. Competitive bids were not competitive. We have 4 cars and drivers, including young adults living away from home. Our homeowner's is through a separate underwriter but meets GEICO's minimum requirements.

DetroitRick
Posts: 357
Joined: Wed Mar 23, 2016 9:28 am

Re: Do you have an umbrella policy?

Postby DetroitRick » Sat Apr 15, 2017 5:30 pm

Got one in 2010, $5 million and still have it. Yearly premiums just declined to $464 this year, after being at $581 since I first purchased.

When I got the policy, I got 3 quotes as I recall. High to low premiums for the same coverage varied by maybe $200 for us. I then happened to select the same company that wrote my auto coverage - which differed from my homeowners company back then. Starting last year, I carry all 3 with the same company.

When I was shopping, my home insurer wouldn't do the umbrella unless I moved my auto coverage to them as well. My auto insurer didn't have that requirement and just required a copy of my homeowners coverage. Simple enough to satisfy.

Personally, I could have worked with anything in the common $1 to $5 million coverage range, but the $5 million premium was reasonable to me. Premium is highly dependent on location and personal risk factors. Like any insurance, exact coverage details and claims-paying reputations are important - but I noticed little substantive difference in the 3 alternatives I checked out. The thought process involves getting enough coverage to cover potential future judgements (but really, who knows what that could be anymore?) - you are protecting not just current net worth but future earnings.

Ron Ronnerson
Posts: 693
Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: Do you have an umbrella policy?

Postby Ron Ronnerson » Sat Apr 15, 2017 5:55 pm

Yes, for $1M.

User avatar
CardinalRule
Posts: 39
Joined: Sun Jan 15, 2017 11:01 am
Location: Pacific Northwest

Re: Do you have an umbrella policy?

Postby CardinalRule » Sat Apr 15, 2017 6:34 pm

We (wife and I) have $1 million, soon to be bumped up to $2 million or more.

Currently, we pay $165 a year with State Farm. Two vehicles, one residence. State Farm is our only insurer.

Kudos to Kiplinger's for bringing this cheap and necessary coverage to our attention three years ago,

User avatar
tdhg566
Posts: 859
Joined: Thu Mar 08, 2007 4:37 pm
Location: Spring, TX

Re: Do you have an umbrella policy?

Postby tdhg566 » Sat Apr 15, 2017 7:34 pm

Yep. Have had an one all my life. Retired now. In this society, where people can sue you, and win, for looking at them sideways, it's pennywise and pound foolish not to have one.
My work in retirement must be retiree friendly, geographically portable, mentally stimulating, personally profitable and emotionally rewarding.

clown
Posts: 32
Joined: Sun Jan 03, 2016 2:04 am

Re: Do you have an umbrella policy?

Postby clown » Sat Apr 15, 2017 7:48 pm

Yes, $1MM policy. The price is cheap compared to a lot of things in our life -- sporting event tickets, lattes, etc. $2MM coverage was not twice as expensive as $1MM coverage, and so would be a relative bargain, but I only needed $1MM. There is a bit of a hidden cost, at least with my insurer. Before they will write an umbrella, they require that you increase your auto insurance and homeowners to the max liability coverage they offer. I happen to think that is a good thing. The difference between $250K and $500K liability coverage on the auto policy was a mere pittance, as was the case on homeowners. Now that we have retired and moved to an apartment, we have no more homeowners insurance, so the umbrella is relatively more important.

LarryAllen
Posts: 580
Joined: Fri Apr 22, 2016 9:41 am
Location: State of Confusion

Re: Do you have an umbrella policy?

Postby LarryAllen » Sat Apr 15, 2017 7:54 pm

Have $3m. That should cover most reasonable settlement demands I should think.

It has nothing to do with one's net worth. For those that factor that in you are kidding yourself. You are protecting whatever assets you have (big or small) AND your future income stream. It's a no brainer. If you don't have an umbrella I would really be interested in why, besides that you are cheap.

tibbitts
Posts: 6686
Joined: Tue Feb 27, 2007 6:50 pm

Re: Do you have an umbrella policy?

Postby tibbitts » Sat Apr 15, 2017 8:26 pm

clown wrote:Yes, $1MM policy. The price is cheap compared to a lot of things in our life -- sporting event tickets, lattes, etc. $2MM coverage was not twice as expensive as $1MM coverage, and so would be a relative bargain, but I only needed $1MM. There is a bit of a hidden cost, at least with my insurer. Before they will write an umbrella, they require that you increase your auto insurance and homeowners to the max liability coverage they offer. I happen to think that is a good thing. The difference between $250K and $500K liability coverage on the auto policy was a mere pittance, as was the case on homeowners. Now that we have retired and moved to an apartment, we have no more homeowners insurance, so the umbrella is relatively more important.

Not all insurers require $500k base coverage. Some insurers do charge twice as much for twice as much coverage.

aj76er
Posts: 266
Joined: Tue Dec 01, 2015 11:34 pm
Location: Portland, OR

Re: Do you have an umbrella policy?

Postby aj76er » Sat Apr 15, 2017 9:20 pm

Yes, for $1m coverage.

Back when I was a landlord for a few years, I decided to get umbrella insurance to help cover any unforeseen liability issues and/or lawsuits. I'm no longer a landlord, but have decided to keep the umbrella insurance as it is a good thing to have.
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle

Nicolas
Posts: 561
Joined: Wed Aug 22, 2012 7:41 am

Re: Do you have an umbrella policy?

Postby Nicolas » Sat Apr 15, 2017 9:27 pm

1reason2live4 wrote:We carry a $2m policy...plus $500k auto liability so that about covers us for our current situation. As our net worth increases so will our umbrella policy.

Same here, two million in coverage, $274 per year from Safeco. One house, two cars, two drivers, 500K underlying coverage. Thinking of going to three million next year.

boglerdude
Posts: 399
Joined: Fri Jul 10, 2015 1:28 am

Re: Do you have an umbrella policy?

Postby boglerdude » Sat Apr 15, 2017 9:50 pm

quantAndHold wrote:I have three different friends that have needed an umbrella policy. Two had it. One didn't. All three situations were bullsh*t lawsuits over minor car accidents, that should never have gone to court. The whole thing was MUCH more expensive and troublesome for the people who didn't have the umbrella policy than for the people who did.

Was the problem actually that he was under-insured on auto? Umbrellas are usually just an extension of the underlying liability coverage.

Details on these cases would be interesting :)

User avatar
High Income Parent
Posts: 153
Joined: Tue Jan 29, 2013 10:11 pm
Location: USA
Contact:

Re: Do you have an umbrella policy?

Postby High Income Parent » Sat Apr 15, 2017 10:13 pm

Yep. Carry a $1 million policy. Pay about $200 a year for it. Tough to beat that peace of mind.

I had a buddy where it came in handy when he was sued for a car accident and medical bills. Hopefully it never comes in handy for me.
Children are not a distraction from more important work. They are the most important work. | | C. S. Lewis

cudds
Posts: 53
Joined: Wed Dec 03, 2014 12:33 pm

Re: Do you have an umbrella policy?

Postby cudds » Sat Apr 15, 2017 11:05 pm

$3 million.... $540/ year premium. That covers three vehicles, primary home and rental home. All insurances under same company for home, auto, renters and umbrella.

One financial advisor described umbrella insurance as " a giant condom over your entire life."

Teague
Posts: 602
Joined: Wed Nov 04, 2015 6:15 pm

Re: Do you have an umbrella policy?

Postby Teague » Sat Apr 15, 2017 11:10 pm

I've got umbrella insurance. One of the underappreciated things, as I understand it, is that umbrella insurance can act similar to substantial legal insurance, as well as covering your liability insurance.

Should the random bad thing happen and you are sued for a large sum, the umbrella company tends to send in a really top-notch legal team to handle it. After all, they have a lot on the line. High-powered attorneys on your side increases the chance that the judgement against you will be reduced, or possibly eliminated. Which could be quite important if you're sued for $5 million and your policy only covers $2 million.
Semper Augustus

User avatar
White Coat Investor
Posts: 12703
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: Do you have an umbrella policy?

Postby White Coat Investor » Sat Apr 15, 2017 11:40 pm

I'm surprised how many people have "total peace of mind" with a mere $5M in coverage. There is no such thing as total peace of mind in this life. Every day I go to work and every patient I treat has the potential to sue me successfully for a multiple of what I carry in malpractice coverage. What good does $5M do if the person you hit and kill makes $5M a year?

The point is to have something in place. First, it will pay for a defense that hopefully will result in getting the plaintiff to settle for policy limits. Second, it gives you a chance to do something to try to make what you did wrong right. Yes, you killed somebody, but at least you know their stay at home spouse and kids aren't now on the street. Third, it gives the lawyers a pot of money to go after. It's actually very rare for a doctor to lose personal assets in a malpractice suit. If the doc doesn't win (which happens most of the time) he settles for policy limits most of the time. Or the award is less than policy limits. Or the award is reduced to policy limits on appeal. Very rare. I suspect it is also very rare to go above policy limits in the personal liability world.

So buy something. Keep it in place. Know that it is almost surely going to be enough whether it is $1M or $5M and then realize there are no guarantees in life. The good news is that if you're a good little boglehead and have been maxing out your retirement accounts, then even if you are successfully sued for $500 Million, in most states you get to at least keep your retirement accounts!

I'm always surprised how many people recommend you buy as much umbrella as you have assets. As if what you have is some indication of what you can be sued for. Bizarre really. If you have enough that bankruptcy is a bad option, you need a 7 figure umbrella policy.

My $2M umbrella is $315 a year. My $1M malpractice policy is $16K a year. The likelihood of me being sued successfully above my malpractice limit is about 1/10,000 per year. Given how umbrella is priced, I suspect my risk of being sued above policy limits is even lower than that.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

User avatar
F150HD
Posts: 836
Joined: Fri Sep 18, 2015 7:49 pm

Re: Do you have an umbrella policy?

Postby F150HD » Sun Apr 16, 2017 10:10 am

Loik098 wrote: I'm willing to bet that you can do better than having separate policies with different companies.


Iridium wrote:Are you sure it wouldn't be cheaper (not to mention easier) to put everything under the motorcycle insurer?


Not to detract from the point of this thread but....

My home/auto insurer does insure cycles I just didn't want to bog down the original post w/ that information as I wanted info on umbrellas, not on motorcycle insurance.

My home/auto insurer rates on cycles is much, much higher then a separate policy from a company that specializes in motorcycles and has add on coverages specific to motorcycles (they pay for trip interruption if the bike breaks down, pay for add-on coverage for non-OEM items one installs on a bike, one gets discounts for being a HOG member, having extra safety training etc).
I have noticed that many companies change their cycle insurance offerings frequently so will re-inquire w/ my agent about bikes this week, but in the past it has been a fruitless conversation. TBD.

Anyway...back to umbrellas. Thank you for your responses!

danaht
Posts: 388
Joined: Sun Oct 18, 2015 11:28 am

Re: Do you have an umbrella policy?

Postby danaht » Sun Apr 16, 2017 10:20 am

I have an umbrella policy - but it's only for 1M. It offers a little more peace of mind than not having one at all.

hmw
Posts: 344
Joined: Sun Mar 02, 2014 11:44 am

Re: Do you have an umbrella policy?

Postby hmw » Sun Apr 16, 2017 10:42 am

We have a 2 million policy through AMICA.

User avatar
AAA
Posts: 742
Joined: Sat Jan 12, 2008 8:56 am

Re: Do you have an umbrella policy?

Postby AAA » Sun Apr 16, 2017 10:44 am

I started out with $1M and gradually went up to $5M. Latter is maybe a bit excessive, but when I inquired this year I was told it would only save about $140 a year to drop down to $2M. So I kept $5M - would not be happy with myself should the insurance become needed and I missed out on $3M of coverage for $140.

LarryAllen
Posts: 580
Joined: Fri Apr 22, 2016 9:41 am
Location: State of Confusion

Re: Do you have an umbrella policy?

Postby LarryAllen » Sun Apr 16, 2017 11:17 am

White Coat Investor wrote:I'm surprised how many people have "total peace of mind" with a mere $5M in coverage. There is no such thing as total peace of mind in this life. Every day I go to work and every patient I treat has the potential to sue me successfully for a multiple of what I carry in malpractice coverage. What good does $5M do if the person you hit and kill makes $5M a year?

The point is to have something in place. First, it will pay for a defense that hopefully will result in getting the plaintiff to settle for policy limits. Second, it gives you a chance to do something to try to make what you did wrong right. Yes, you killed somebody, but at least you know their stay at home spouse and kids aren't now on the street. Third, it gives the lawyers a pot of money to go after. It's actually very rare for a doctor to lose personal assets in a malpractice suit. If the doc doesn't win (which happens most of the time) he settles for policy limits most of the time. Or the award is less than policy limits. Or the award is reduced to policy limits on appeal. Very rare. I suspect it is also very rare to go above policy limits in the personal liability world.

So buy something. Keep it in place. Know that it is almost surely going to be enough whether it is $1M or $5M and then realize there are no guarantees in life. The good news is that if you're a good little boglehead and have been maxing out your retirement accounts, then even if you are successfully sued for $500 Million, in most states you get to at least keep your retirement accounts!

I'm always surprised how many people recommend you buy as much umbrella as you have assets. As if what you have is some indication of what you can be sued for. Bizarre really. If you have enough that bankruptcy is a bad option, you need a 7 figure umbrella policy.

My $2M umbrella is $315 a year. My $1M malpractice policy is $16K a year. The likelihood of me being sued successfully above my malpractice limit is about 1/10,000 per year. Given how umbrella is priced, I suspect my risk of being sued above policy limits is even lower than that.



There is certainly no such thing as "total peace of mind." Everybody has risks in life. Some people have more than others. Professionals like doctors and lawyers get sued, business owners get sued, landlords get sued, people with teenage drivers get sued, etc.... Of course any of us can get sued. There also is always a risk that such lawsuit could exceed our insurance coverage no matter what we have. However, for most people $2m umbrella (or $2m of professional negligence protection) is probably enough for most situation. It is highly unlikely (but not impossible) for a claimant not to accept $2m and be done with the lawsuit. However, there is always that risk. I think each person needs to take an honest look at their liability risk and also what coverage they need to sleep at night. A friend was recently in a debilitating accident where he was not at fault. The person who hit him has $100k of liability coverage. This is not even close to enough to cover medical bills. However, my friend made the choice to accept the policy limits of $100k and move on because the guy that hit him was some old guy who appeared to have no assets. My point is if you have assets (or future income stream) to protect it's even more important to have good coverage AND maybe look into asset protection steps to make your assets less visible to potential plaintiffs.

AlohaJoe
Posts: 2149
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: Do you have an umbrella policy?

Postby AlohaJoe » Sun Apr 16, 2017 11:29 am

No, I don't have umbrella insurance.

I'm pretty sure it doesn't even exist in the country I live in. Just getting term life insurance (as opposed to whole) required calling four different insurance companies.

User avatar
SurfCityBill
Posts: 382
Joined: Tue May 01, 2012 10:15 pm
Location: Southern California

Re: Do you have an umbrella policy?

Postby SurfCityBill » Sun Apr 16, 2017 3:10 pm

For you umbrella policy owners, would a typical policy cover my non-minor dependent children? (Currently students)

Rwsavory
Posts: 14
Joined: Mon Mar 07, 2016 8:17 pm

Re: Do you have an umbrella policy?

Postby Rwsavory » Sun Apr 16, 2017 3:56 pm

SurfCityBill wrote:For you umbrella policy owners, would a typical policy cover my non-minor dependent children? (Currently students)


Our policy covers "family members," who are defined, generally, as related persons residing in the household. It further states, "your unmarried dependent children, wards and foster children while temporarily away from home will be considered residents if they intend to resume living in your household."

Ron
Posts: 6018
Joined: Fri Feb 23, 2007 7:46 pm

Re: Do you have an umbrella policy?

Postby Ron » Sun Apr 16, 2017 4:26 pm

Yes.

$1M / $260/yr.

- Ron

wolf359
Posts: 986
Joined: Sun Mar 15, 2015 8:47 am

Re: Do you have an umbrella policy?

Postby wolf359 » Sun Apr 16, 2017 4:55 pm

Wow. It either seems to be $1 million or $5 million (with a smattering of $2 million responses).

How should you choose your level of coverage?

When a lawyer decides whether or not it's worth it to go after you, what can they see, and what do they consider? I'm assuming they can see whether or not you own a home, and whether or not it's paid off. If you own a business, that's probably public record as well. If your profession is traditionally high-salary, you're also an obvious target (doctor, lawyer, officer in a company). How visible are your assets to someone considering suing you?

Aren't personal residences and retirement accounts difficult assets to sue against? Wouldn't that be the bulk of assets for many Bogleheads?

lazylarry
Posts: 323
Joined: Sat Apr 04, 2015 10:35 pm
Contact:

Re: Do you have an umbrella policy?

Postby lazylarry » Sun Apr 16, 2017 5:09 pm

What are things we should look for in an umbrella coverage policies? Or are they generally the same in terms of what they cover? And the best (cheapest) way to get one is just to call around to different insurance agencies (I've heard folks having it through Geico, State Farm, etc)?
Asking questions: https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212 | My profile: https://www.bogleheads.org/forum/memberlist.php?mode=viewprofile&u=86026

Gray
Posts: 489
Joined: Sat Apr 16, 2011 5:33 am

Re: Do you have an umbrella policy?

Postby Gray » Sun Apr 16, 2017 5:13 pm

I just got a $3M policy through USAA, this week but it is apparently very hard to qualify for this. They pass many policies to third parties through an "agency" setup (e.g., Chubb, etc.) for their less-stellar applicants. Don't get any traffic tickets...

In fact, we had some speed trap tickets on our record and a no-fault accident. I tried to apply based on my new VA address and was denied. I spoke to one of their senior specialists and she put the application through based on my MD address and it was approved. The strategy is to hope that when renewal time comes, the negatives will have slid further back in time. (MD is more lenient in its insurance policies)

User avatar
Artsdoctor
Posts: 2718
Joined: Thu Jun 28, 2012 3:09 pm
Location: Los Angeles, CA

Re: Do you have an umbrella policy?

Postby Artsdoctor » Sun Apr 16, 2017 5:54 pm

Yes. $2M at $400/year.

User avatar
JoMoney
Posts: 4197
Joined: Tue Jul 23, 2013 5:31 am

Re: Do you have an umbrella policy?

Postby JoMoney » Sun Apr 16, 2017 6:45 pm

No. (at least, not yet)
But I also don't own a car, guns, or have an occupation prone to lawsuits.
The bulk of my assets are also essentially 'judgement proof'. It doesn't get much discussion on here, perhaps because of the differences from state to state, perhaps because of the connotations of relying on those protections, but people should probably be aware that in many states retirement accounts/income, and homesteads (that aren't pledged as collateral on a loan), along with some other exemptions, can't be garnished in a judgement with a few exceptions (the big ones being divorce or taxes owed).
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

bgrpph
Posts: 34
Joined: Sat Jul 05, 2014 2:46 am

Re: Do you have an umbrella policy?

Postby bgrpph » Sun Apr 16, 2017 7:52 pm

have $3M- cost has slowly gone up last 3-5 yrs yrs- now at $600 annually

keith6014
Posts: 157
Joined: Thu Jan 02, 2014 11:58 pm

Re: Do you have an umbrella policy?

Postby keith6014 » Sun Apr 16, 2017 8:20 pm

are there any companies that provide UP without a driver's license?

Grt2bOutdoors
Posts: 16383
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Do you have an umbrella policy?

Postby Grt2bOutdoors » Sun Apr 16, 2017 8:24 pm

LarryAllen wrote:

However, there is always that risk. I think each person needs to take an honest look at their liability risk and also what coverage they need to sleep at night. A friend was recently in a debilitating accident where he was not at fault. The person who hit him has $100k of liability coverage. This is not even close to enough to cover medical bills. However, my friend made the choice to accept the policy limits of $100k and move on because the guy that hit him was some old guy who appeared to have no assets. My point is if you have assets (or future income stream) to protect it's even more important to have good coverage AND maybe look into asset protection steps to make your assets less visible to potential plaintiffs.


If your friend would have had PIP (personal injury protection) and under/uninsured coverage, his own insurance company would have compensated him for the cost of injuries the other party did not cover. Given the high costs of medical care, these low policy limits for liability should be disallowed. But that is likely due to the auto industry lobbying, otherwise who is going to buy their cars? :annoyed
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Grt2bOutdoors
Posts: 16383
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Do you have an umbrella policy?

Postby Grt2bOutdoors » Sun Apr 16, 2017 8:25 pm

bgrpph wrote:have $3M- cost has slowly gone up last 3-5 yrs yrs- now at $600 annually


Still cheap, ever hire a lawyer? The minimum is at least $1K and that is just for the first meeting, the tolls continue each time you ring their phone.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

sherwink
Posts: 201
Joined: Mon May 28, 2007 9:48 am

Re: Do you have an umbrella policy?

Postby sherwink » Sun Apr 16, 2017 8:28 pm

I carry $5M in umbrella insurance as the last line of defense. For the peace of mind, it's worth it.

Grt2bOutdoors
Posts: 16383
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Do you have an umbrella policy?

Postby Grt2bOutdoors » Sun Apr 16, 2017 8:42 pm

wolf359 wrote:Wow. It either seems to be $1 million or $5 million (with a smattering of $2 million responses).

How should you choose your level of coverage?

When a lawyer decides whether or not it's worth it to go after you, what can they see, and what do they consider? I'm assuming they can see whether or not you own a home, and whether or not it's paid off. If you own a business, that's probably public record as well. If your profession is traditionally high-salary, you're also an obvious target (doctor, lawyer, officer in a company). How visible are your assets to someone considering suing you?

Aren't personal residences and retirement accounts difficult assets to sue against? Wouldn't that be the bulk of assets for many Bogleheads?


What do they see? They go through a process called discovery. They will find out your policy limits, they will have your address of residence, they will dig through public databases, you would be surprised how much "dirt" there is on folks out there. Depends, how much do you utilize the shredder in your home? (you do have one right? - cross-cut?) :twisted:

Umbrella coverage is above and beyond the liability limits on your auto and home insurance. Assume your auto insurance liability limits are $500K, home insurance liability is also $500K. You have an umbrella of $2 million. You have total liability limits of $3 million. As noted, most states will not permit the retirement shield for IRA's, 401k's 403(b) to be pierced, so those are usually off limits. But if you have large cash/cd's, taxable accounts (how many posters are talking about their taxable accounts on the forum? - alot!), brokerage accounts, collectibles, precious metals - those can be lien'ed upon. You want to buy enough to form a big enough moat to keep the plantiffs from taking those assets, usually they will settle for policy limits (you hope!).
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions


Return to “Personal Finance (Not Investing)”

Who is online

Users browsing this forum: aqan, auntie, Carefreeap, Google Feedfetcher, hand, JohnFiscal, kylevet, OnTrack2020, PartIrish, Spirit Rider and 92 guests