Do you have an umbrella policy?

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JW-Retired
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Re: Do you have an umbrella policy?

Postby JW-Retired » Sun Apr 16, 2017 8:46 pm

sherwink wrote: I carry $5M in umbrella insurance as the last line of defense. .....

Yep, same here. It's only $550 for $5M, which IMO is a fantastic bargain given the vast number of high salaried people sharing the freeway near me.
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knpstr
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Re: Do you have an umbrella policy?

Postby knpstr » Sun Apr 16, 2017 8:53 pm

Don't settlements usually go for whatever someone's insurance is, within reason?

If $5M policy, settle for $5M
If $1M policy, settle for $1M

While not absolutely true, isn't this part of the game?

It's no use suing for $10M when someone is worth $400K
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neilpilot
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Re: Do you have an umbrella policy?

Postby neilpilot » Sun Apr 16, 2017 9:33 pm

Grt2bOutdoors wrote: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.


Actually, your liability limit is $2.5 million, since the auto & home liability limits are not additive.

Also, some umbrella coverage policies quote TOTAL liability coverage (i.e. the auto or home liability limits are not additive with the excess liability policy), so there's $2 million TOTAL coverage with that type of policy. You need to read your policy.

random_walker_77
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Re: Do you have an umbrella policy?

Postby random_walker_77 » Sun Apr 16, 2017 9:44 pm

AAA wrote: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.


These insurance companies are quite interested in making sure you don't lose these rare but large lawsuits. Without umbrella, they might just say, "here's your 100K, good luck with that", as the legal costs to fight it just aren't worth it to them. For 1M, they've got a million reasons to make sure you don't lose. For 5M, they're probably going to assign their A team.

We've got 3M coverage for ~$450/yr. It used to be $300, but has slowly crept up. Getting the mustang convertible didn't help rates.

iamlucky13
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Re: Do you have an umbrella policy?

Postby iamlucky13 » Sun Apr 16, 2017 10:01 pm

Mudpuppy wrote: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


That's more than I spend on all three of those combined. ;-)

What others are describing above sounds like an umbrella policy is a good way to bump the likely settlement value from your savings (leaving too small of a cut to be worth it for many lawyers) up to your savings + the umbrella limit.

Anyways, I don't own a business, I have a clean driving record, I treat my firearms carefully, etc. and I currently do not have an umbrella policy. I suppose I will consider it more when my non-ERISA assets increase closer to my other liability coverage.


* EDIT - added "closer to", last sentence.
Last edited by iamlucky13 on Mon Apr 17, 2017 4:04 am, edited 1 time in total.

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Re: Do you have an umbrella policy?

Postby Mudpuppy » Mon Apr 17, 2017 2:33 am

iamlucky13 wrote:What others are describing above sounds like an umbrella policy is a good way to bump the likely settlement value from your savings (leaving too small of a cut to be worth it for many lawyers) up to your savings + the umbrella limit.

Anyways, I don't own a business, I have a clean driving record, I treat my firearms carefully, etc. and I currently do not have an umbrella policy. I suppose I will consider it more when my non-ERISA assets increase my other liability coverage.

Settlements are not determined by your current asset and liability policy limits. They can get a judgment against your future earnings as well, not just what you have now. So if you are at fault (even partially) and the judgement against you is $1 million, you're paying that whether you have the assets or not. Better to have the policy and have the insurers pay out than to have a garnishment of your wages for decades.

And a clean driving record doesn't prevent a life-altering accident from occurring, as those can happen to the best of drivers on occasion. Your clean driving record also isn't going to get you off the hook if you are determined to be even partially at fault in an accident where the other party suffers major injury or dies.

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JoMoney
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Re: Do you have an umbrella policy?

Postby JoMoney » Mon Apr 17, 2017 2:54 am

Mudpuppy wrote:
iamlucky13 wrote:What others are describing above sounds like an umbrella policy is a good way to bump the likely settlement value from your savings (leaving too small of a cut to be worth it for many lawyers) up to your savings + the umbrella limit.

Anyways, I don't own a business, I have a clean driving record, I treat my firearms carefully, etc. and I currently do not have an umbrella policy. I suppose I will consider it more when my non-ERISA assets increase my other liability coverage.

Settlements are not determined by your current asset and liability policy limits. They can get a judgment against your future earnings as well, not just what you have now. So if you are at fault (even partially) and the judgement against you is $1 million, you're paying that whether you have the assets or not. Better to have the policy and have the insurers pay out than to have a garnishment of your wages for decades.

And a clean driving record doesn't prevent a life-altering accident from occurring, as those can happen to the best of drivers on occasion. Your clean driving record also isn't going to get you off the hook if you are determined to be even partially at fault in an accident where the other party suffers major injury or dies.
Someone could sue and get a judgement and could garnish wages, but if the person can't pay it, and it would take "decades" of wage garnishment, it's entirely possible the judgement could get dismissed in bankruptcy. Every situation is going to be different and have nuances that impact things... but you can't squeeze blood from a turnip...
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

iamlucky13
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Re: Do you have an umbrella policy?

Postby iamlucky13 » Mon Apr 17, 2017 4:03 am

Mudpuppy wrote:
iamlucky13 wrote:What others are describing above sounds like an umbrella policy is a good way to bump the likely settlement value from your savings (leaving too small of a cut to be worth it for many lawyers) up to your savings + the umbrella limit.

Anyways, I don't own a business, I have a clean driving record, I treat my firearms carefully, etc. and I currently do not have an umbrella policy. I suppose I will consider it more when my non-ERISA assets increase my other liability coverage.

Settlements are not determined by your current asset and liability policy limits. They can get a judgment against your future earnings as well, not just what you have now. So if you are at fault (even partially) and the judgement against you is $1 million, you're paying that whether you have the assets or not. Better to have the policy and have the insurers pay out than to have a garnishment of your wages for decades.


Garnishing is generally limited to approximately 1/4 of income. That's obviously a lot of money, but it's not a life-destroying expense, and the insurance rates indicate the general risk is quite low - certainly far lower than the risk than even index investing, even if in some scenarios more severe in its consequences.

Mudpuppy wrote:And a clean driving record doesn't prevent a life-altering accident from occurring, as those can happen to the best of drivers on occasion. Your clean driving record also isn't going to get you off the hook if you are determined to be even partially at fault in an accident where the other party suffers major injury or dies.


At-fault being the key word. Yes, I know facts are a loose concept in civil trials, especially when the jury is instructed to decide whether a story seems "more probable than not", but I'm pretty confident I'm at low relative (compared to the actuarial model) risk of ending up in such a trial. Risk of a lawsuit doesn't scare me anywhere near as much as the thought of being responsible for seriously hurting someone else does. The latter is the real motivation for constantly cultivating good driving habits.

jlcnuke
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Re: Do you have an umbrella policy?

Postby jlcnuke » Mon Apr 17, 2017 7:15 am

Yes. $1M for $134/year currently.

wolf359
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Re: Do you have an umbrella policy?

Postby wolf359 » Mon Apr 17, 2017 8:47 am

Grt2bOutdoors wrote:
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!).


Thank you for the response.

I found a similar answer to my question here. https://www.forbes.com/sites/ashleaebel ... fcb2d61669

The relevant recommendation from this 2012 Forbes article was:

The right umbrella amount depends on where you live, your profession and your aversion to risk. Liability coverage in home and auto policies rarely exceeds $500,000, yet 13% of personal injury liability awards and settlements are $1 million or more, according to the report, citing data from Jury Verdict Research. The amount of coverage you choose should bear some relation to your net worth. But note: if you're worth $1 million, a $1 million umbrella is not going to protect you from a $2 million legal judgment, since it would still be worth a lawyer's time to go after your personal assets. So even if your net worth is below $2 million, you should consider a $2 million umbrella.

Don’t skimp on coverage. Coverage at least equal to your current net worth is the typical recommendation. However, if coverage falls short, a judge could order you to pay up, liquidating savings and investments (retirement plans and trusts are usually safe), real estate and personal property—and even garnishing your wages. Consider adding coverage to equal the present value of your employment income stream.

How much do umbrella policies run? The typical annual cost quoted by ACE for a client with one home, two cars and two drivers is $383 for $1 million in coverage, $474 for $2 million in coverage, $608 for $5 million in coverage and $999 for $10 million in coverage. Add two more homes, two more cars, one boat under 26 feet, and a driver under age 25, and it costs $563 for $1 million in coverage, $1,578 for $10 million in coverage, for example.

fishmonger
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Re: Do you have an umbrella policy?

Postby fishmonger » Mon Apr 17, 2017 8:59 am

I carry $1M for around $20/month.

Picked it up when we owned a rental property out of state and I couldn't be there all the time. Also helps me sleep at night when I'm coaching youth sports, playing golf, driving my boat, etc.

CurlyDave
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Re: Do you have an umbrella policy?

Postby CurlyDave » Mon Apr 17, 2017 9:02 am

random_walker_77 wrote:... For 5M, they're probably going to assign their A team.

We've got 3M coverage for ~$450/yr. It used to be $300, but has slowly crept up.


My thinking also.

I found that $5M is only slightly more expensive than $1M.

Having all your insurance with one company assures they will extend the umbrella to other policies. Otherwise it is not a guarantee. Plus they may not be so eager to drop you after a claim if they have a large amount of other insurance that will go to someone else.

Our umbrella does not extend to our rentals.

natureexplorer
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Re: Do you have an umbrella policy?

Postby natureexplorer » Mon Apr 17, 2017 9:17 am

Telling people that you have liability insurance increases your chances of getting sued.

Nowizard
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Re: Do you have an umbrella policy?

Postby Nowizard » Mon Apr 17, 2017 9:23 am

Definitely. Seems like the cheapest insurance out there to me once you already have car and home insurance, particularly if with the same company. Less than $200 annually is a small price to pay. Our agent, by the way, said that the information regarding whether one exists is very difficult for opposing lawyers to obtain if they are fishing around for a suit since those are so frequent, even with small occurrences. He said this since many thing having an umbrella policy is an invitation for a law suit.

Tim

Dek17
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Re: Do you have an umbrella policy?

Postby Dek17 » Mon Apr 17, 2017 10:00 am

We bought a 2M policy two years ago (now paying $455/yr) after taking a financial management course. Our instructor explained the importance of having Umbrella insurance with examples which makes total sense. We bought it at the same company that provide our car and HO insurance policies. When I asked many friends and family if they have this insurance all said no and many didn't know what it is.

Da5id
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Re: Do you have an umbrella policy?

Postby Da5id » Mon Apr 17, 2017 10:04 am

Yes, have a 2M insurance policy. Got it on advice of my father, and it does provide some peace of mind. Mind you, a good part of my assets are at least partially shielded (home, retirement). Still seems like a good hedge against a terrible result.

Don't remember rates, but they did take a bump up when I added my son to my auto insurance just after he learned to drive.

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Re: Do you have an umbrella policy?

Postby Mudpuppy » Mon Apr 17, 2017 10:38 am

natureexplorer wrote:Telling people that you have liability insurance increases your chances of getting sued.

No, it doesn't. They have to file a lawsuit to start the discovery process. You have no obligation to tell them this information until the discovery process begins. So you'd already be in a lawsuit before the other party would know you have umbrella insurance.

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unclescrooge
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Re: Do you have an umbrella policy?

Postby unclescrooge » Mon Apr 17, 2017 12:19 pm

Do umbrella coverage limits always increase in multiples of $1 million?

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gasdoc
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Re: Do you have an umbrella policy?

Postby gasdoc » Mon Apr 17, 2017 12:24 pm

Yes. $5M. I want the other attorney to have this decision to make.... I can work a little for an easy $5Million, or I can work a lot for $5Million plus personal assets. I want the umbrella to be enough that he/she settles for the "easy $5Million" umbrella.

gasdoc

wolf359
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Re: Do you have an umbrella policy?

Postby wolf359 » Mon Apr 17, 2017 12:28 pm

unclescrooge wrote:Do umbrella coverage limits always increase in multiples of $1 million?

That's all I've ever seen quoted.

Kompass
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Re: Do you have an umbrella policy?

Postby Kompass » Mon Apr 17, 2017 12:53 pm

I just recently increased my umbrella. I thought the max I could get without going to a specialty provider was $5 million. I get that for about $500 yr from Allstate. My agent recently changed and I was verifying that maximum and he checked some other sources for me and it turned out I was able to piggy back another "excess umbrella policy" through an affiliated company on top of it.

I opted for another $5 million after quibbling with myself over whether I should just add another 3 or go for 5 at a couple of hundred dollars more. I went for the 5 at another $650 yr when I compared it to another cost I have. I realized that for total of roughly $100 per mo I would have a $10m policy and a legal team on standby to protect the rest of my life for the same amount of money to I pay to get the grass cut ($25 per week).

Perspective :shock:
The large print giveth and the fine print taketh away.

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DaftInvestor
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Re: Do you have an umbrella policy?

Postby DaftInvestor » Mon Apr 17, 2017 1:21 pm

I've got an umbrella policy. Its with the same carrier as my home-owners. They require a copy of my auto-policy in order to verify my limits there (to help them set their prices). A lot of people are quoting what they are paying for $1M, $2M, $5M - I have found the price is dependent upon a number of factors including your other policies, existence of the pool on property, number of autos owned, number of drivers of autos, age/experience of drivers, etc. So if you hear someone is paying only $150 yearly for a $1M policy don't think that might be the price you are quoted.

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DaftInvestor
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Re: Do you have an umbrella policy?

Postby DaftInvestor » Mon Apr 17, 2017 1:28 pm

Mudpuppy wrote:
natureexplorer wrote:Telling people that you have liability insurance increases your chances of getting sued.

No, it doesn't. They have to file a lawsuit to start the discovery process. You have no obligation to tell them this information until the discovery process begins. So you'd already be in a lawsuit before the other party would know you have umbrella insurance.


Unless you hang a sign on the front of your house or on your car or wear a T-shirt "that says I'm $5M Umbrella Policy Holder" :)
Akin to advertising that you keep $5,000 in cash under your mattress and when you are going on vacation.

deltaneutral83
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Re: Do you have an umbrella policy?

Postby deltaneutral83 » Mon Apr 17, 2017 1:47 pm

So what happens in an unfortunate auto situation where you are at fault and the other car had 4 "high earners." They'd blow right through 10 million?

fittan
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Re: Do you have an umbrella policy?

Postby fittan » Mon Apr 17, 2017 2:14 pm

Yes 1 million for about $250/year at Geico

Da5id
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Re: Do you have an umbrella policy?

Postby Da5id » Mon Apr 17, 2017 2:18 pm

deltaneutral83 wrote:So what happens in an unfortunate auto situation where you are at fault and the other car had 4 "high earners." They'd blow right through 10 million?


You can't insure against all possible loses. You also are note insured against a large asteroid strike or nuclear war. Question becomes what seems to you likely enough to insure against, and also what it is worthwhile to insure against. Insuring against "worst possible case" legal judgement seems like you can't afford it.

neilpilot
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Re: Do you have an umbrella policy?

Postby neilpilot » Mon Apr 17, 2017 2:46 pm

fittan wrote:Yes 1 million for about $250/year at Geico


As other's have said, it depends on your particular exposure. My 2 mil coverage is $292, also at GEICO.

talzara
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Re: Do you have an umbrella policy?

Postby talzara » Mon Apr 17, 2017 4:06 pm

Mudpuppy wrote:
natureexplorer wrote:Telling people that you have liability insurance increases your chances of getting sued.

No, it doesn't. They have to file a lawsuit to start the discovery process. You have no obligation to tell them this information until the discovery process begins. So you'd already be in a lawsuit before the other party would know you have umbrella insurance.


In many states, the insurer is required to disclose all applicable policy limits. A lawsuit does not have to be in progress.

talzara
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Re: Do you have an umbrella policy?

Postby talzara » Mon Apr 17, 2017 4:56 pm

Grt2bOutdoors wrote: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


There are provinces in Canada where the minimum bodily injury limit is $500k.

Germany requires €7.5 million of liability insurance.

Aviva, the second-largest car insurer in the UK, sells a "budget car insurance" policy that includes unlimited bodily injury liability, £20 million of property liability, and £5 million of legal defense: http://www.aviva.co.uk/car-insurance/th ... ire-theft/

Of course, these countries are much less litigious and have much lower healthcare costs. They can afford to buy eye-popping amounts of liability coverage because large damage awards are so rare.

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jimmyq
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Re: Do you have an umbrella policy?

Postby jimmyq » Mon Apr 17, 2017 5:01 pm

2M for $200/yr through Erie Insurance. And hope I never need it.

rebellovw
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Re: Do you have an umbrella policy?

Postby rebellovw » Mon Apr 17, 2017 5:32 pm

talzara wrote:
Mudpuppy wrote:
natureexplorer wrote:Telling people that you have liability insurance increases your chances of getting sued.

No, it doesn't. They have to file a lawsuit to start the discovery process. You have no obligation to tell them this information until the discovery process begins. So you'd already be in a lawsuit before the other party would know you have umbrella insurance.


In many states, the insurer is required to disclose all applicable policy limits. A lawsuit does not have to be in progress.


Following is a decent article on this - hiding the limit is in the insurance company's best interest and the insured could suffer from that.

https://www.irmi.com/articles/expert-commentary/disclosing-policy-limits-in-liability-claims-a-landmine-for-bad-faith

Also for my state:
https://www.avvo.com/legal-answers/in-az--does-the-claimants-attorney-get-information-521992.html

Which seems a lawsuit has to be filed for the limits to be presented (forced) - but as per the earlier article - having the limits could prevent the lawsuit.

Anyhow - thanks for this thread - I recently requested a quote on the cost - and today accepted it.

Teague
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Re: Do you have an umbrella policy?

Postby Teague » Mon Apr 17, 2017 5:37 pm

deltaneutral83 wrote:So what happens in an unfortunate auto situation where you are at fault and the other car had 4 "high earners." They'd blow right through 10 million?


Which is why I avoid driving anywhere near congregations of newly boarded neurosurgeons and orthopedists. :wink:

rebellovw
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Re: Do you have an umbrella policy?

Postby rebellovw » Mon Apr 17, 2017 5:42 pm

Teague wrote:
deltaneutral83 wrote:So what happens in an unfortunate auto situation where you are at fault and the other car had 4 "high earners." They'd blow right through 10 million?


Which is why I avoid driving anywhere near congregations of newly boarded neurosurgeons and orthopedists. :wink:



Don't drive in the Bay Area. Hahaaa

Luckywon
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Re: Do you have an umbrella policy?

Postby Luckywon » Mon Apr 17, 2017 7:36 pm

Yes, $5 million from AAA, costs $660/year. Live in southern california.

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cockersx3
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Re: Do you have an umbrella policy?

Postby cockersx3 » Mon Apr 17, 2017 7:57 pm

I have a $2mm umbrella policy for about $400/yr. Didn't put much thought into the value though... $1mm didn't seem like enough, so went with the next step up. I was originally thinking that more than $2mm would just be excessive, but after reading this thread I'm not so sure!!

For the money, though, umbrella insurance is definitely worth the piece of mind. Didn't even know this type of insurance existed before reading BH...yet another good reason to participate in this forum!! :beer

dave_k
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Re: Do you have an umbrella policy?

Postby dave_k » Mon Apr 17, 2017 10:36 pm

Recently increased our umbrella from $1M to $2M, cost went from about $200/y to $300/y. Have 3 cars, a boat, and 2 houses, one of which is a vacation rental.

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gasdoc
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Re: Do you have an umbrella policy?

Postby gasdoc » Tue Apr 18, 2017 8:56 am

dave_k wrote:Recently increased our umbrella from $1M to $2M, cost went from about $200/y to $300/y. Have 3 cars, a boat, and 2 houses, one of which is a vacation rental.


We went up to $5M on the umbrella when we purchased and started renting out our future retirement home, and at the same time had a teenager start driving.

gas

ResearchMed
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Re: Do you have an umbrella policy?

Postby ResearchMed » Tue Apr 18, 2017 9:18 am

gasdoc wrote:
dave_k wrote:Recently increased our umbrella from $1M to $2M, cost went from about $200/y to $300/y. Have 3 cars, a boat, and 2 houses, one of which is a vacation rental.


We went up to $5M on the umbrella when we purchased and started renting out our future retirement home, and at the same time had a teenager start driving.

gas


Did you double check that you don't need a separate umbrella policy for the rental?
Some "personal home" policies won't cover that.

RM
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michaeljc70
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Re: Do you have an umbrella policy?

Postby michaeljc70 » Tue Apr 18, 2017 9:22 am

No, but I should. The prices I am seeing quoted here seem low. I got a quote a year or two ago and to bring my other policies up to the required level and get the Umbrella, it was in the $300 range for $1M (1 car, 1 townhouse). I am with Progressive. I need to shop around or just bite the bullet and get it done.

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Re: Do you have an umbrella policy?

Postby michaeljc70 » Tue Apr 18, 2017 9:28 am

Mudpuppy wrote:
iamlucky13 wrote:What others are describing above sounds like an umbrella policy is a good way to bump the likely settlement value from your savings (leaving too small of a cut to be worth it for many lawyers) up to your savings + the umbrella limit.

Anyways, I don't own a business, I have a clean driving record, I treat my firearms carefully, etc. and I currently do not have an umbrella policy. I suppose I will consider it more when my non-ERISA assets increase my other liability coverage.

Settlements are not determined by your current asset and liability policy limits. They can get a judgment against your future earnings as well, not just what you have now. So if you are at fault (even partially) and the judgement against you is $1 million, you're paying that whether you have the assets or not. Better to have the policy and have the insurers pay out than to have a garnishment of your wages for decades.

And a clean driving record doesn't prevent a life-altering accident from occurring, as those can happen to the best of drivers on occasion. Your clean driving record also isn't going to get you off the hook if you are determined to be even partially at fault in an accident where the other party suffers major injury or dies.


I think settlements are often determined by policy limits. Especially when there are not a lot of other assets to go after. At least that is what I've heard from people involved in such suits. It can be very hard to collect judgements. The court most likely won't make you sell your home, sometimes they cannot go after retirement funds (varies by state), etc.

runner3081
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Re: Do you have an umbrella policy?

Postby runner3081 » Tue Apr 18, 2017 2:57 pm

We have 1 Million for $201 per year.

We have a pool, house and 3 cars.

The umbrella is a separate company from our other policies.

Umbrella = Stillwater
Home & Auto = AAA
Second Auto Policy = Grundy

Slacker
Posts: 166
Joined: Thu May 26, 2016 8:40 am

Re: Do you have an umbrella policy?

Postby Slacker » Tue Apr 18, 2017 3:13 pm

Currently have $1M Umbrella policy and requisite liability limits on Auto, Renter's and Rental policies. Set up the Umbrella policy as soon as we put our first rental property into service.

Currently we live in a small bedroom / retirement community in a low cost of living area.
We may be moving to a very high cost of living area - we'll probably increase our liability coverage to $2M or $3M if we do make the move.

renue74
Posts: 673
Joined: Tue Apr 07, 2015 7:24 pm

Re: Do you have an umbrella policy?

Postby renue74 » Tue Apr 18, 2017 3:22 pm

$3M Geico policy is $500/year. We have 3 rental properties on it. Live in S.C.

I feel like $500 is a lot, but I'm assuming the rentals jack it up a little.

All insurance switched to Geico last year. (Home, auto, umbrella)

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gunn_show
Posts: 1194
Joined: Wed Jun 06, 2007 3:02 pm

Re: Do you have an umbrella policy?

Postby gunn_show » Tue Apr 18, 2017 4:51 pm

Socal, through Nationwide (carry my auto and home) getting rates of $142 for 1mil up to $525 for $5mil. Will probably settle for a $2mil policy at a little over $200/yr. Having been a former insurance agent for years before switching to technology sales, I can attest that all it takes is that 'one freak accident' to ruin it all. Well worth carrying the coverage and praying you never ever use it, just like any and all insurance. Call around and get a few quotes, it always gets the best rates to quote all three policies with the same firm (home, auto, boat, moto, umrella, etc) for the multi-policy discounts and ease of use. If you ever need to use it, there will never be a question or concern of "who's policy pays out first?" when they are all written by the same firm.
"I love competition. And I want to win." R. Murdoch

neilpilot
Posts: 496
Joined: Fri Dec 04, 2015 1:46 pm
Location: Memphis area

Re: Do you have an umbrella policy?

Postby neilpilot » Tue Apr 18, 2017 5:13 pm

gunn_show wrote:Call around and get a few quotes, it always gets the best rates to quote all three policies with the same firm (home, auto, boat, moto, umrella, etc) for the multi-policy discounts and ease of use.

Agree to call around, but you don't ALWAYS save by writing all coverage with same company. After decades with Nationwide, I saved $$ by shopping coverage. Saved $200/yr by going to GEICO for auto & umbrella, home with Farmers. Less than if I had written all 3 policies with either company. As for ease of use, it's unclear why there would be any confusion. What issues have you experienced when coverage is split?

523HRR
Posts: 81
Joined: Tue Mar 11, 2014 8:27 pm

Re: Do you have an umbrella policy?

Postby 523HRR » Tue Apr 18, 2017 5:41 pm

$5mm -- $453 annually.

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gunn_show
Posts: 1194
Joined: Wed Jun 06, 2007 3:02 pm

Re: Do you have an umbrella policy?

Postby gunn_show » Tue Apr 18, 2017 5:56 pm

neilpilot wrote:
gunn_show wrote:Call around and get a few quotes, it always gets the best rates to quote all three policies with the same firm (home, auto, boat, moto, umrella, etc) for the multi-policy discounts and ease of use.

Agree to call around, but you don't ALWAYS save by writing all coverage with same company. After decades with Nationwide, I saved $$ by shopping coverage. Saved $200/yr by going to GEICO for auto & umbrella, home with Farmers. Less than if I had written all 3 policies with either company. As for ease of use, it's unclear why there would be any confusion. What issues have you experienced when coverage is split?


Your experiences make sense as well. Unfortunately GEICO is not as competitive in CA, as are many insurers here. I used Wawanesa for many years, typically the cheapest by a mile, until my wife had an accident and that goes over their 1 point max limit for drivers. Thus, Nationwide. In a year or two I will probably research around again.

In terms of the last comment, I am not stating 'specific issues by experience', but merely pointing out that going this method (carrying all coverage with 1 vendor) leaves absolutely ZERO doubt if anything were to come into question, that's all. That is the simplest route IMO. Dealing with multiple vendors will always leave more room for error or issues, no matter how small the potential. Just a tactic, not necessarily one every person needs to deploy. YMMV.
"I love competition. And I want to win." R. Murdoch

boglerdude
Posts: 377
Joined: Fri Jul 10, 2015 1:28 am

Re: Do you have an umbrella policy?

Postby boglerdude » Tue Apr 18, 2017 11:12 pm

deltaneutral83 wrote:So what happens in an unfortunate auto situation where you are at fault and the other car had 4 "high earners." They'd blow right through 10 million?

Option 1: Lawyer settles, collects your 1MM umbrella and underlying auto limit, and takes his ~33% contingency fee. $400k for a few days work.

Option 2: He sets aside $30k of his, to cover the costs of trial. It could be a year+ of litigation, and he needs the jury to award more than your insurance limits + his fees. And that you have enough assets.

Meanwhile you explain to the jury that many people choose to retire early, so there's no way to know how much those folks would earn over a lifetime. And you present your dash cam footage, showing that you were not texting, as an eye witness claimed.

If the jury awards more than your insurance, you go bankrupt and maybe keep retirement accounts and some home equity, depending on state.

Not a lawyer, so anyone please add to or correct.

michaeljc70
Posts: 1359
Joined: Thu Oct 15, 2015 3:53 pm

Re: Do you have an umbrella policy?

Postby michaeljc70 » Wed Apr 19, 2017 7:14 am

deltaneutral83 wrote:So what happens in an unfortunate auto situation where you are at fault and the other car had 4 "high earners." They'd blow right through 10 million?


You try to insure against most situations. Almost no one is insured to cover any possible situation. What if you hit Bill Gates driving a $10M rare Ferrari? What if you cause a 40 car pile up? What if there is an earthquake in an area there never was an earthquake before and your house is destroyed? People don't buy earthquake insurance and their regular policy doesn't cover that.

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BogleFanGal
Posts: 24
Joined: Mon Mar 20, 2017 6:59 pm

Re: Do you have an umbrella policy?

Postby BogleFanGal » Wed Apr 19, 2017 8:55 am

Wish I could get some of these low umbrella rates other people are paying...mine is $330 for only 1m and I called around - that was the cheapest and includes the discount from home/auto with same carrier. Tried to get 2m and it MORE than doubled. :shock:

Unfortunately I'm in a HCOL area, one of the highest-cost insurance areas in U.S. for both auto and home AND a highly-litigious state - triple whammy. :annoyed But I keep telling myself it's still a smart move and reasonably priced policy to keep, given the scary alternative. Luckily our state excludes retirement and home from legal judgments, so that's something, I guess.


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