Umbrela Insurance is it worth?

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njay73
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Joined: Wed Jan 01, 2014 9:47 am

Umbrela Insurance is it worth?

Post by njay73 »

I recently hit 2M net worth and looking to get a umbrella insurance to protect my assets.
- I own home and have condo insurance.
- I don't have Car and Don't Drive.

When I called insurance company they said I must have car insurance to get umbrella coverage. one option they suggested is get no-car-owner-liability-only insurance to qualify for Umbrella.
Quote is : 360 ( car) + 315 (umbrella) = 675 (total) per year

I am wondering if I don't drive what are the situation that I might get claim on my asset. is 600 worth?
EHEngineer
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Re: Umbrela Insurance is it worth?

Post by EHEngineer »

If someone trips on your cracked sidewalk and hits their head they can sue you. Totally worth it IMO.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius
donall
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Re: Umbrela Insurance is it worth?

Post by donall »

Yes, I ran into this with a relative when they no longer had a car and did not drive. I just increased the homeowner's and rental building insurance limits. The amounts were reasonable for the extra liability insurance in comparison to an umbrella insurance for a 90 year old driver. The only problem was that the umbrella insurance was cancelled automatically without telling us, so there were a few months with less liability coverage.

I'm trying to remember but I think the extra amount for $1,000,000 more liability coverage was about the same as the umbrella insurance. The big savings was not having car insurance that cost almost $2,000 per year for $1000 deductible.
Last edited by donall on Sun Apr 30, 2017 12:15 pm, edited 1 time in total.
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KlingKlang
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Re: Umbrela Insurance is it worth?

Post by KlingKlang »

njay73 wrote:I recently hit 2M net worth and looking to get a umbrella insurance to protect my assets.
- I own home and have condo insurance.
- I don't have Car and Don't Drive.

When I called insurance company they said I must have car insurance to get umbrella coverage. one option they suggested is get no-car-owner-liability-only insurance to qualify for Umbrella.
I would check with at least one other insurance company to make sure that this is correct.

What is the liability coverage on your condo insurance? How much could you increase that while still spending less than $675?
carolinaman
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Re: Umbrela Insurance is it worth?

Post by carolinaman »

njay73 wrote:I recently hit 2M net worth and looking to get a umbrella insurance to protect my assets.
- I own home and have condo insurance.
- I don't have Car and Don't Drive.

When I called insurance company they said I must have car insurance to get umbrella coverage. one option they suggested is get no-car-owner-liability-only insurance to qualify for Umbrella.
Quote is : 360 ( car) + 315 (umbrella) = 675 (total) per year

I am wondering if I don't drive what are the situation that I might get claim on my asset. is 600 worth?
Auto and home accidents are probably the most common lawsuits but you can also be sued for other things like libel. We live in a litigious society, so the extra protection of UI is usually worth it, although yours is a little more pricey because you do not drive.
samsmith
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Re: Umbrela Insurance is it worth?

Post by samsmith »

From my point of view. Almost certainly something you will never use.
And totally worth having.
talzara
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Re: Umbrela Insurance is it worth?

Post by talzara »

njay73 wrote:I recently hit 2M net worth and looking to get a umbrella insurance to protect my assets.
- I own home and have condo insurance.
- I don't have Car and Don't Drive.

When I called insurance company they said I must have car insurance to get umbrella coverage. one option they suggested is get no-car-owner-liability-only insurance to qualify for Umbrella.
Quote is : 360 ( car) + 315 (umbrella) = 675 (total) per year
That would be a waste of money. You would be paying $675 a year for less than $50 worth of liability coverage.

85% of the umbrella exposure comes from excess auto liability. Since you don't drive, your auto liability exposure is $0. You would be wasting 100% of the auto insurance premium and 85% of the umbrella policy premium.

The liability coverage on most condo policies can be increased to $1 million. Some insurers will write $2 million of primary liability coverage if you ask. Call around and get quotes.
larsm
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Re: Umbrela Insurance is it worth?

Post by larsm »

Only if you get sued. If not: waste of money. But than that approach pretty much summarizes all insurance...
remomnyc
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Re: Umbrela Insurance is it worth?

Post by remomnyc »

You should have umbrellla to protect your assets.

We also don't own a car. We rent 5-10 days/year. We found two options when we shopped for umbrella. Metlife homeowners + umbrella. The caveat is that you need to get liability whenever you rent a car, which could be $10-$20/day for the umbrella coverage to be effective. Geico offered a non-owner auto policy + homeowners + umbrella. We would not have to purchase liability when we rented cars. If we were to rent more than 12 days a year, Geico would have been cheaper. I think Chubb also offered umbrella without car insurance, but it was 3x more than Metlife or Geico.
talzara
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Re: Umbrela Insurance is it worth?

Post by talzara »

EHEngineer wrote:If someone trips on your cracked sidewalk and hits their head they can sue you. Totally worth it IMO.
He doesn't need umbrella for that. Sidewalk liability would be covered by the association's master insurance policy.
carolinaman wrote: Auto and home accidents are probably the most common lawsuits but you can also be sued for other things like libel. We live in a litigious society, so the extra protection of UI is usually worth it, although yours is a little more pricey because you do not drive.
He doesn't need umbrella for that either. Homeowners insurance policies offer protection against libel suits, either in the policy itself or in an endorsement. You may pay extra for it, but it'll be a lot less than $675.

However, umbrella policies do fill in gaps in coverage. Here's an example:
Gap Description: Joe is 80 years old. He has no car and no longer drives, but he occasionally needs to be driven by others to doctor appointments, shopping, etc. Under principal/agency statutes and caselaw, Joe can be sued if his driver causes an accident, but Joe has no personal auto insurance policy and therefore no coverage.

Analysis: Choose USLI, who provides vicarious auto liability without requiring underlying insurance.

https://www.irmi.com/articles/expert-co ... a-policies
EHEngineer
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Re: Umbrela Insurance is it worth?

Post by EHEngineer »

talzara wrote:
EHEngineer wrote:If someone trips on your cracked sidewalk and hits their head they can sue you. Totally worth it IMO.
He doesn't need umbrella for that. Sidewalk liability would be covered by the association's master insurance policy.
he owns a home and a condo.

consider "sidewalk" a generic term, meaning all walking surfaces on one's property.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius
talzara
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Re: Umbrela Insurance is it worth?

Post by talzara »

EHEngineer wrote: he owns a home and a condo.
That's not what he wrote:
njay73 wrote: - I own home and have condo insurance.
I read that to mean that he owns "a" home, which happens to be a condo. Otherwise, why buy condo insurance and not homeowners insurance?
EHEngineer wrote: consider "sidewalk" a generic term, meaning all walking surfaces on one's property.
If it's within the limits of his condominium, then it would be covered by his own condo policy. He doesn't need umbrella.

There are gaps in coverage that might lead someone to buy umbrella, but this isn't one of them.
Last edited by talzara on Sun Apr 30, 2017 9:26 pm, edited 1 time in total.
EHEngineer
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Re: Umbrela Insurance is it worth?

Post by EHEngineer »

talzara wrote:
EHEngineer wrote: he owns a home and a condo.
That's not what he wrote:
njay73 wrote: - I own home and have condo insurance.
wow. I misread that twice.
talzara wrote: I read that to mean that he owns "a" home, which happens to be a condo. Otherwise, why buy condo insurance and not homeowners insurance?
seems right.

anyway, I believe in umbrella as a cheap catch all (excpet professional liability). For someone who as "won the game" just think of it as a small success tax. lots of people out there who would like to cash in on a small accident with some link to a deep pocket.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius
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TheTimeLord
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Re: Umbrela Insurance is it worth?

Post by TheTimeLord »

Just upped mine thanks to a reminder of from another thread recently.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
boglerdude
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Re: Umbrela Insurance is it worth?

Post by boglerdude »

Has anyone selected an umbrella provider because of gap coverage? ie the umbrella covers things not covered by your underlying auto & homeowners

That decision would require reading a lot of fine print
JGoneRiding
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Re: Umbrela Insurance is it worth?

Post by JGoneRiding »

KlingKlang wrote:
njay73 wrote:I recently hit 2M net worth and looking to get a umbrella insurance to protect my assets.
- I own home and have condo insurance.
- I don't have Car and Don't Drive.

When I called insurance company they said I must have car insurance to get umbrella coverage. one option they suggested is get no-car-owner-liability-only insurance to qualify for Umbrella.
I would check with at least one other insurance company to make sure that this is correct.

What is the liability coverage on your condo insurance? How much could you increase that while still spending less than $675?
This. HomeownerS covers a lot of what umbrella is for and if you had a specific risk you could get a rider. Massively increase homeowners. I have umbrella in part cause it covers the rentals.
nalor511
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Re: Umbrela Insurance is it worth?

Post by nalor511 »

State farm will write 2 mil in personal liability on top of a renters or homeowners policy, but you have to call and ask, can't do it online
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celia
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Re: Umbrela Insurance is it worth?

Post by celia »

remomnyc wrote:You should have umbrellla to protect your assets.
Even if you don't have any assets, you can be found liable. And you can be found liable for more than the value of your assets.
We also don't own a car. We rent 5-10 days/year. ... The caveat is that you need to get liability whenever you rent a car, which could be $10-$20/day for the umbrella coverage to be effective. Geico offered a non-owner auto policy + homeowners + umbrella. We would not have to purchase liability when we rented cars.
When you rent a car, you most likely are buying short-term CAR insurance. The liability that is included in the car insurance only covers people or property that are impacted by an accident involving the rental car. This is NOT the same kind of liability or amount that umbrella insurance covers.
IowaFarmBoy
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Re: Umbrela Insurance is it worth?

Post by IowaFarmBoy »

Nalor mentioned this. Another option is to increase the liability limits on you condo/homeowners policy. Your carrier may also offer a rider to your homeowners policy that includes the extended protections like libel/slander/etc.

When our kids became teens, the rate on our umbrella understandably went up considerably. I found it was cheaper to increase the liability limits on our autos and our homeowners to $1 million and then add the rider offering the extended protection so we did that for several years.
carolinaman
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Re: Umbrela Insurance is it worth?

Post by carolinaman »

I assessed my overall situation when I retired and determined that one risk I had was liability insurance for auto and homeowners that would be too low for the multi million dollar lawsuits that seem all too common today. Also, there are other situations that might arise that could cause someone to sue you, libel is one. I bought $3M of liability insurance for $300 per year. It seems pretty cheap for the coverage. Likely it will never be needed, but it seems a small price to pay for added peace of mind.
Flashes1
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Re: Umbrela Insurance is it worth?

Post by Flashes1 »

I'm "cheap" when it comes to insurance (no extra life insurance on my spouse & I), but I even splurged on a $1MM umbrella policy when our NW hit the OP's threshold. It gives me peace of mind.
remomnyc
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Re: Umbrela Insurance is it worth?

Post by remomnyc »

celia wrote:
remomnyc wrote:You should have umbrellla to protect your assets.
Even if you don't have any assets, you can be found liable. And you can be found liable for more than the value of your assets.
We also don't own a car. We rent 5-10 days/year. ... The caveat is that you need to get liability whenever you rent a car, which could be $10-$20/day for the umbrella coverage to be effective. Geico offered a non-owner auto policy + homeowners + umbrella. We would not have to purchase liability when we rented cars.
When you rent a car, you most likely are buying short-term CAR insurance. The liability that is included in the car insurance only covers people or property that are impacted by an accident involving the rental car. This is NOT the same kind of liability or amount that umbrella insurance covers.
Not sure if my point is being lost. Since we do not have car insurance, In order for the Metlife umbrella to be effective, we are required to purchase liability when we rent a car. With Geico, we would have had on-going separate non-owner car liability coverage; however, the aggregate cost was higher than Metlife due to the few days we rent annually.
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