When to have an Umbrella insurance policy

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justsomeguy2018
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When to have an Umbrella insurance policy

Post by justsomeguy2018 » Sat Aug 24, 2019 10:28 am

Do you recommend having an Umbrella policy at all times?

Or only once you get to a certain level of assets/net worth?

If so, at what level (dollar amount wise) is it advisable to take out an Umbrella policy, and how big of a policy (dollar wise) should you take out? e.g. if you have $500,000 in assets do you recommend having a $1M umbrella policy?

What's a reasonable annual price for a a $1M umbrella policy?

Thanks.

Call_Me_Op
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Re: When to have an Umbrella insurance policy

Post by Call_Me_Op » Sat Aug 24, 2019 10:45 am

There are many posts you can search on this topic. Bottom line is you should consider umbrella insurance if you have a job and/or assets you do not want to lose. There is no consensus on how to calculate the appropriate amount, but many recommend an amount of 1X - 2X your exposed net worth. Exposed net worth refers to the fraction of your net worth that is not exempt from lawsuits, and does not include protected assets such as 401k balance or a house covered by homestead.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

runner3081
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Re: When to have an Umbrella insurance policy

Post by runner3081 » Sat Aug 24, 2019 11:25 am

For how cheap it is, yes, everyone should have $1m in coverage (or more, if warranted). At least in my opinion.

David Althaus
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Re: When to have an Umbrella insurance policy

Post by David Althaus » Sat Aug 24, 2019 1:46 pm

Agree with Runner 3081. For about $150 per million per year it's very cheap. Consider: you get the insurance company's entire legal staff working for you with this $150 retainer--with absolute commitment to protecting the company's $1M.

All the best

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NavyIC3
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Re: When to have an Umbrella insurance policy

Post by NavyIC3 » Sat Aug 24, 2019 1:53 pm

An umbrella policy will protect your future earnings from being garnisheed. Without it, it's possible you would be paying off a law suit for the rest of your life.

KT785
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Re: When to have an Umbrella insurance policy

Post by KT785 » Sat Aug 24, 2019 2:18 pm

David Althaus wrote:
Sat Aug 24, 2019 1:46 pm
Consider: you get the insurance company's entire legal staff working for you with this $150 retainer--with absolute commitment to protecting the company's $1M.
Quite a gross exaggeration of how it actually works . . . do not assume you’re getting any better (or different) counsel than the carrier would hire based on underlying auto/home coverage or that the defense they muster would be demonstrably different with/without an umbrella policy.

I have an umbrella policy and wouldn’t be without one, but it’s for the additional coverage (liability limits and risks covered) that it offers over and above my auto/home coverage.

To the OP, if you’re at the point you’re asking if you need umbrella insurance, then you likely need it. $1 million is a good starting point and adjust up from there.

KT785

CurlyDave
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Re: When to have an Umbrella insurance policy

Post by CurlyDave » Sat Aug 24, 2019 11:39 pm

IMHO, you need an umbrella policy when it looks to the most aggressive lawyer you can imagine that you might be able to pay a judgement higher than the policy limit on your ordinary insurance policy.

And, the amount of policy you need is in no way related to your net worth.

Umbrella policies are incredibly cheap.

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scubadiver
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Re: When to have an Umbrella insurance policy

Post by scubadiver » Sun Aug 25, 2019 1:30 am

NavyIC3 wrote:
Sat Aug 24, 2019 1:53 pm
An umbrella policy will protect your future earnings from being garnisheed. Without it, it's possible you would be paying off a law suit for the rest of your life.
To be clear, an umbrella policy, no matter how large, does not guarantee protection of your assets or future earnings. If you have a judgement against you above your policy coverage, those items are still at risk. The umbrella insurance does however provide an additional buffer between you and the individual(s) suing you.

My recommendations to you are two-fold: (1) Avoid becoming a distracted driver in general and, in particular, stay off your phone while driving and (2) Get a minimum of $1M in umbrella coverage.

Call_Me_Op
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Re: When to have an Umbrella insurance policy

Post by Call_Me_Op » Sun Aug 25, 2019 6:23 am

scubadiver wrote:
Sun Aug 25, 2019 1:30 am
NavyIC3 wrote:
Sat Aug 24, 2019 1:53 pm
An umbrella policy will protect your future earnings from being garnisheed. Without it, it's possible you would be paying off a law suit for the rest of your life.
To be clear, an umbrella policy, no matter how large, does not guarantee protection of your assets or future earnings. If you have a judgement against you above your policy coverage, those items are still at risk.
True in theory, but can you cite a single example where this has happened?
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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siamond
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Re: When to have an Umbrella insurance policy

Post by siamond » Sun Aug 25, 2019 6:53 am

Call_Me_Op wrote:
Sat Aug 24, 2019 10:45 am
There are many posts you can search on this topic. Bottom line is you should consider umbrella insurance if you have a job and/or assets you do not want to lose. There is no consensus on how to calculate the appropriate amount, but many recommend an amount of 1X - 2X your exposed net worth. Exposed net worth refers to the fraction of your net worth that is not exempt from lawsuits, and does not include protected assets such as 401k balance or a house covered by homestead.
OP, do pay attention to this excellent point made by Call_Me_Op and the text I emphasized. There is a lot of confusion about this topic, but it is NOT about your total net worth, definitely not. If the bulk of your net worth is made of a 401k (or a corresponding roll-over IRA) and you have a declaration of homestead for your house that covers most of its value (it's worth $500k in MA), then there is little point having an umbrella insurance. Furthermore, in some states (but NOT ALL), regular and Roth IRAs are also protected, i.e. not exposed. Then it may boil down to your taxable account, and how much you care about protecting it against a very low probability (but highly impacting) event.

Now the counterpart is that the attacking lawyer may very well go after MORE than your exposed assets. Notably if you're still working and have a high salary. So... your future earnings are also exposed (apparently not SS/Pensions though, although it isn't 100% clear), with no limit.

I would add another point, which is that umbrella insurances are definitely more expensive than advertised. They constrain what you can do with auto and home insurance. Case in point, I can't remove the comprehensive/collision coverage on my (fairly recent) car until they agree to. Case in point, my younger son just got his driver's license and going to college in the city nearby (barely needing to drive in practice), we wanted to set him as occasional driver of our older car and not the newer one, but we can't. This last fact basically doubles the price of our umbrella insurance.

There is no magic here. Insurers undoubtedly play scare tactics and make good profits on umbrella insurances. Whether you go along or not has to be a well-thought decision.

vshun
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Re: When to have an Umbrella insurance policy

Post by vshun » Sun Aug 25, 2019 7:07 am

Call_Me_Op wrote:
Sun Aug 25, 2019 6:23 am
scubadiver wrote:
Sun Aug 25, 2019 1:30 am
NavyIC3 wrote:
Sat Aug 24, 2019 1:53 pm
An umbrella policy will protect your future earnings from being garnisheed. Without it, it's possible you would be paying off a law suit for the rest of your life.
To be clear, an umbrella policy, no matter how large, does not guarantee protection of your assets or future earnings. If you have a judgement against you above your policy coverage, those items are still at risk.
True in theory, but can you cite a single example where this has happened?
A counterpoint - not many can quote examples of umbrella policy being used, at least I did not see it on many similar threads that pop every couple of months on this forum.
I carried 2 mln umbrella for $300 (1 mln was $200) with my auto/home insurance carrier (1 house/2 cars, no boats/etc), but as umbrella policy price went up once I added my teenage son as driver on auto policy, I cancelled it. I felt if part of umbrella justification is because housekeeper can fall downstairs/etc why teenage driver affects it (we have really high limits on auto policy due to umbrella requirements anyway so it should cover most of accidents without umbrella).
In other words, umbrella is rarely used and pricing on it is a voodoo, resulting in probably non competitive non efficient market and we are probably paying for admin fees and actuarial/admin/lawyer staffing in umbrella department in insurance companies just in case.

MikeG62
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Re: When to have an Umbrella insurance policy

Post by MikeG62 » Sun Aug 25, 2019 7:16 am

Call_Me_Op wrote:
Sun Aug 25, 2019 6:23 am
scubadiver wrote:
Sun Aug 25, 2019 1:30 am
NavyIC3 wrote:
Sat Aug 24, 2019 1:53 pm
An umbrella policy will protect your future earnings from being garnisheed. Without it, it's possible you would be paying off a law suit for the rest of your life.
To be clear, an umbrella policy, no matter how large, does not guarantee protection of your assets or future earnings. If you have a judgement against you above your policy coverage, those items are still at risk.
True in theory, but can you cite a single example where this has happened?
I think I’ve read every post that was ever written on this forum about Umbrella insurance and, other than the situation I will describe in the next sentence, I don’t recall a single example of someone with an Umbrella having paid a judgement against them for more than the combined amount of their underlying and umbrella coverages. There is one forum member who has posted in a number of these threads who is a lawyer with several decades of litigation experience in this area and I believe he has said in 20 years of his personal litigation experience he has seen only one case where the defendant had to come out of pocket to settle a claim about his/her policy limits. See here:

viewtopic.php?f=2&t=282930&p=4583993&hi ... a#p4583993

Further, in that same thread he states that he personally does not carry any umbrella insurance.

Having said all that, I have personally seen an umbrella pay out. See my story here.

viewtopic.php?f=2&t=282930&p=4586963&hi ... a#p4586963

It is in part for this reason that I maintain an umbrella insurance policy with coverage of $5 million. Costs me ~$1,000 per year. It allows me to sleep much more comfortable at night.

OP, as others have said, this topic has been covered in numerous threads on this forum. Search for and read those for more background information and opinions.
Real Knowledge Comes Only From Experience

student
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Re: When to have an Umbrella insurance policy

Post by student » Sun Aug 25, 2019 7:18 am

My experience is that it is about $150 for 1 million dollars. It is worth it in my opinion.

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Re: When to have an Umbrella insurance policy

Post by Call_Me_Op » Sun Aug 25, 2019 7:42 am

In my mind, purchasing umbrella insurance is the perfect application (by analogy) of Pascal's Wager. It allows you to avoid something really bad at a very modest price. Even if the chance of needing it were one part in a billion, it would still be worth getting because the consequences of not having it are potentially catastrophic.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

invest4
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Re: When to have an Umbrella insurance policy

Post by invest4 » Sun Aug 25, 2019 7:55 am

I guess 'cheap' is relative. I recently looked into a $1M umbrella policy which would cost around $700 + an additional $300 to raise my policy limits to meet the eligibility requirements. The X factor being that I have 2 driving teenagers which drives up the cost.

Is the consensus that the policy is worth the price of admission ($1000 / yr in my case)?

Chris K Jones
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Re: When to have an Umbrella insurance policy

Post by Chris K Jones » Sun Aug 25, 2019 8:40 am

I have three kids. The youngest is still a teen and I have maintained umbrellas for decades. In my opinion, it is worth it. It would be for me anyway. Best wishes.

Cheyenne
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Re: When to have an Umbrella insurance policy

Post by Cheyenne » Sun Aug 25, 2019 8:42 am

I have a question about umbrella policies that is slightly off topic.

A few weeks ago I purchased an umbrella policy for the reasons stated here, and also because I belong to a club that has it's clubhouse located on an airport, and they require an umbrella policy to be able to drive a car on the airport property. When applying for the driving pass I discovered that the insurer refuses to sign the airport's Certificate of Liability Insurance which the airport requires. They said it would grant the airport part ownership of my car and any claim paid to me would have both my name, and the airport's name on the check, even for claims off of airport property.

This doesn't make sense because there are hundreds of people that have driving passes on the airport and I thought ACORD CLI forms were standard procedure in the industry. I can't seem to get a good explanation from anyone about this. If anyone knowledgeable about the insurance business could shed some light on it I would appreciate it. Thanks.

BernardShakey
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Re: When to have an Umbrella insurance policy

Post by BernardShakey » Sun Aug 25, 2019 9:09 am

invest4 wrote:
Sun Aug 25, 2019 7:55 am
I guess 'cheap' is relative. I recently looked into a $1M umbrella policy which would cost around $700 + an additional $300 to raise my policy limits to meet the eligibility requirements. The X factor being that I have 2 driving teenagers which drives up the cost.

Is the consensus that the policy is worth the price of admission ($1000 / yr in my case)?
Invest4, yes, IMO having teenage drivers under your roof is one of the most compelling reasons for umbrella policy coverage. Young, inexperienced, and potentially distracted drivers are a significant risk. I would buy it immediately. You can always dial back on the amount when they leave the nest.

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scubadiver
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Re: When to have an Umbrella insurance policy

Post by scubadiver » Sun Aug 25, 2019 11:16 am

Call_Me_Op wrote:
Sun Aug 25, 2019 6:23 am
scubadiver wrote:
Sun Aug 25, 2019 1:30 am
NavyIC3 wrote:
Sat Aug 24, 2019 1:53 pm
An umbrella policy will protect your future earnings from being garnisheed. Without it, it's possible you would be paying off a law suit for the rest of your life.
To be clear, an umbrella policy, no matter how large, does not guarantee protection of your assets or future earnings. If you have a judgement against you above your policy coverage, those items are still at risk.
True in theory, but can you cite a single example where this has happened?
You've heard of google, right?

https://wtop.com/national/2019/06/wisco ... sts-death/

kevinpet
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Re: When to have an Umbrella insurance policy

Post by kevinpet » Sun Aug 25, 2019 12:17 pm

I have Geico umbrella and I will be dropping it soon or possibly moving all my insurance elsewhere. Why? Because it doesn't cover what's it's frequently presented as covering.

Specifically, we had an incident where we were dragged into an accident that neither us nor our vehicles were anywhere near. I believe a greedy lawyer just trolled name matches in a database. Geico said that auto insurance would defend, but would not have paid, because the car involved wasn't listed on our policy. The umbrella only applied to cars that were listed on the auto insurance, making it useless for this case.

None of this is what I expected. I didn't buy "excess liability", I bought "umbrella". I wanted coverage for any gaps in my other insurance, not just a higher liability limit. Also disappointed by the pricing. Adding a third vehicle (with only two drivers) increased my premium.

talzara
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Re: When to have an Umbrella insurance policy

Post by talzara » Sun Aug 25, 2019 12:29 pm

vshun wrote:
Sun Aug 25, 2019 7:07 am
I carried 2 mln umbrella for $300 (1 mln was $200) with my auto/home insurance carrier (1 house/2 cars, no boats/etc), but as umbrella policy price went up once I added my teenage son as driver on auto policy, I cancelled it. I felt if part of umbrella justification is because housekeeper can fall downstairs/etc why teenage driver affects it (we have really high limits on auto policy due to umbrella requirements anyway so it should cover most of accidents without umbrella).
The housekeeper falling down the stairs is a very small part of the risk.

85% of the umbrella risk is excess auto liability. That's why a teenage driver is so costly. Although 15% of your premium remains unchanged, the 85% that pays for excess auto liability doubles. So your total premium increases by 85%.

The justification for umbrella is that 37,000 people are killed in motor vehicle accidents each year in the United States. At a life expectancy of 79 years, that's 2.9 million expected deaths at the current fatality rate. That's almost 1% of the population of the United States.

The lifetime claims frequency for umbrella insurance is about 1-2%. That's not a coincidence. It's because umbrella insurance is mostly excess auto liability insurance.

talzara
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Re: When to have an Umbrella insurance policy

Post by talzara » Sun Aug 25, 2019 12:43 pm

kevinpet wrote:
Sun Aug 25, 2019 12:17 pm
Specifically, we had an incident where we were dragged into an accident that neither us nor our vehicles were anywhere near. I believe a greedy lawyer just trolled name matches in a database. Geico said that auto insurance would defend, but would not have paid, because the car involved wasn't listed on our policy. The umbrella only applied to cars that were listed on the auto insurance, making it useless for this case.
GEICO's umbrella applies to any cars that are "insured" by the underlying auto insurance policy. It does not have to be "listed" on the auto policy. For example, a rental car would be covered even though its VIN is not listed on your policy.

This is what the GEICO umbrella policy says:
With respect to a motor vehicle or watercraft, such person is an insured only if the motor vehicle or watercraft is insured by a primary policy.
If neither you nor your cars were involved in the accident, then GEICO's lawyer should bring that up in court.

khh
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Re: When to have an Umbrella insurance policy

Post by khh » Sun Aug 25, 2019 1:08 pm

Does your liability for your teenagers end when they turn 18?

HEDGEFUNDIE
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Re: When to have an Umbrella insurance policy

Post by HEDGEFUNDIE » Sun Aug 25, 2019 1:24 pm

I only bought umbrella insurance because it was cheaper than adding a lower amount of liability coverage to my auto policy.

vshun
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Re: When to have an Umbrella insurance policy

Post by vshun » Sun Aug 25, 2019 1:30 pm

khh wrote:
Sun Aug 25, 2019 1:08 pm
Does your liability for your teenagers end when they turn 18?
I do not believe so, as far as I recall, ours continued past it, so I lost patience and dropped it. As far as I recall, in regards to auto policy,premium goes to the age of 25 years, perhaps liability mirrors that.

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scubadiver
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Re: When to have an Umbrella insurance policy

Post by scubadiver » Sun Aug 25, 2019 1:45 pm

vshun wrote:
Sun Aug 25, 2019 1:30 pm
khh wrote:
Sun Aug 25, 2019 1:08 pm
Does your liability for your teenagers end when they turn 18?
I do not believe so, as far as I recall, ours continued past it, so I lost patience and dropped it. As far as I recall, in regards to auto policy,premium goes to the age of 25 years, perhaps liability mirrors that.
I am not a lawyer. With that caveat, I am fairly certain that you can be held liable for damages incurred from anyone driving a vehicle that you own, regardless of their age or relationship to you.

As for an adult child (i.e., over the age of 18) driving a vehicle that they personally pay for, title and insure, there may be legal buffer, but I will defer to someone with better knowledge of the law than I.

boglerdude
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Re: When to have an Umbrella insurance policy

Post by boglerdude » Mon Aug 26, 2019 2:46 am

"You've heard of google, right?"
https://wtop.com/national/2019/06/wisco ... sts-death/

Never would have gone to trial if the driver had 1M umbrella, wouldve settled like always.

"They also note Hodgson received a text message minutes before the crash and suggest he was distracted. On that count, Hodgson said he never took the phone out of his pocket while approaching the trail crossing."

And get an inner and outer facing dash cam.

UALflyer
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Re: When to have an Umbrella insurance policy

Post by UALflyer » Mon Aug 26, 2019 8:05 am

boglerdude wrote:
Mon Aug 26, 2019 2:46 am
"You've heard of google, right?"
https://wtop.com/national/2019/06/wisco ... sts-death/

Never would have gone to trial if the driver had 1M umbrella, wouldve settled like always.
I have seen a lot of your posts in this forum suggesting that all personal injury claims always settle within people's insurance limits. Not only is this categorically untrue, but you're also confusing cause and effect with these statements.

If you're dealing with a plaintiff who has suffered catastrophic injuries or you have multiple plaintiffs with serious injuries, meaning that the value of the case(s) far exceed $1MM, the decision to settle has to do with the defendant's assets and future income stream that are exposed to judgments. If the defendant's exposed assets are substantial and/or there's a substantial future income stream, the plaintiffs do routinely reject $1MM umbrella policy limits settlements.

In other words, your suggestion that a $1MM personal umbrella is always going to be sufficient to resolve personal injury claims regardless of the defendant's exposed assets and/or future income stream is simply untrue.

What is true though is the fact that most individuals out there don't have that much exposed net worth, as people's assets are frequently concentrated in 401(k)'s, etc.... To the extent that this isn't the case, people frequently employ other asset protection techniques. If you do have substantial assets and/or substantial future income stream exposed though, then simply expecting all plaintiffs to settle their claims within a $1MM umbrella is rather naïve.

UALflyer
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Re: When to have an Umbrella insurance policy

Post by UALflyer » Mon Aug 26, 2019 8:24 am

talzara wrote:
Sun Aug 25, 2019 12:29 pm
vshun wrote:
Sun Aug 25, 2019 7:07 am
I carried 2 mln umbrella for $300 (1 mln was $200) with my auto/home insurance carrier (1 house/2 cars, no boats/etc), but as umbrella policy price went up once I added my teenage son as driver on auto policy, I cancelled it. I felt if part of umbrella justification is because housekeeper can fall downstairs/etc why teenage driver affects it (we have really high limits on auto policy due to umbrella requirements anyway so it should cover most of accidents without umbrella).
The housekeeper falling down the stairs is a very small part of the risk.

85% of the umbrella risk is excess auto liability. That's why a teenage driver is so costly. Although 15% of your premium remains unchanged, the 85% that pays for excess auto liability doubles. So your total premium increases by 85%.

The justification for umbrella is that 37,000 people are killed in motor vehicle accidents each year in the United States. At a life expectancy of 79 years, that's 2.9 million expected deaths at the current fatality rate. That's almost 1% of the population of the United States.

The lifetime claims frequency for umbrella insurance is about 1-2%. That's not a coincidence. It's because umbrella insurance is mostly excess auto liability insurance.
This is spot on. In addition, the "really high limits on auto policy due to umbrella requirements" typically refer to $250K per person/$500K per accident, or a $300K combined single limit. It sounds like a lot of money to people, but with serious injuries, medical bills alone can quickly exceed these limits. If the injury involves multiple people, it doesn't even need to be that serious to very quickly exceed these limits.
MikeG62 wrote:
Sun Aug 25, 2019 7:16 am
I think I’ve read every post that was ever written on this forum about Umbrella insurance and, other than the situation I will describe in the next sentence, I don’t recall a single example of someone with an Umbrella having paid a judgement against them for more than the combined amount of their underlying and umbrella coverages. There is one forum member who has posted in a number of these threads who is a lawyer with several decades of litigation experience in this area and I believe he has said in 20 years of his personal litigation experience he has seen only one case where the defendant had to come out of pocket to settle a claim about his/her policy limits. See here:

viewtopic.php?f=2&t=282930&p=4583993&hi ... a#p4583993
Just keep in mind that this doesn't tell you all that much. Most people out there are largely judgment proof, as they just don't have all that much money, have modest income streams and whatever assets they do have are in 401(k)'s and the like, which are protected from judgment creditors. People with substantial exposed assets and/or substantial future income streams typically know better than to drive around with clearly insufficient liability insurance limits. So, while it is uncommon to end up with situations where the defendants have to come out of pocket to resolve a claim that exceeds insurance limits, it isn't because the other side won't pursue substantial exposed personal assets.

A well known story of a person with substantial exposed assets and clearly insufficient insurance involves Hulk Hogan. Here's an article that talks about his son's crash: https://www.insurancejournal.com/magazi ... 201239.htm According to the article, there was $500K in insurance coverage available at the time. The settlement was apparently in the $5MM range, which would mean that $4.5MM came from his personal assets: https://www.wrestlinginc.com/news/2011/ ... ed-545728/
Last edited by UALflyer on Mon Aug 26, 2019 3:06 pm, edited 1 time in total.

MikeG62
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Re: When to have an Umbrella insurance policy

Post by MikeG62 » Mon Aug 26, 2019 3:02 pm

UALflyer wrote:
Mon Aug 26, 2019 8:24 am
MikeG62 wrote:
Sun Aug 25, 2019 7:16 am
I think I’ve read every post that was ever written on this forum about Umbrella insurance and, other than the situation I will describe in the next sentence, I don’t recall a single example of someone with an Umbrella having paid a judgement against them for more than the combined amount of their underlying and umbrella coverages. There is one forum member who has posted in a number of these threads who is a lawyer with several decades of litigation experience in this area and I believe he has said in 20 years of his personal litigation experience he has seen only one case where the defendant had to come out of pocket to settle a claim about his/her policy limits. See here:

viewtopic.php?f=2&t=282930&p=4583993&hi ... a#p4583993
Just keep in mind that this doesn't tell you all that much. Most people out there are largely judgment proof, as they just don't have all that much money, have modest income streams and whatever assets they do have are in 401(k)'s and the like, which are protected from judgment creditors. People with substantial exposed assets and/or substantial future income streams typically know better than to drive around with clearly insufficient liability insurance limits. So, while it is uncommon to end up with situations where the defendants have to come out of pocket to resolve a claim that exceeds insurance limits, it isn't because the other side won't pursue substantial exposed personal assets.
This is precisely the reason I carry a $5 million umbrella on top of my underlying Auto and Homeowners (each of which has $500K of liability coverage). Most of my net worth is in taxable brokerage and bank accounts.

I also kicked my daughters off my auto policies once they graduated college. They have cars titled in their own names and their own insurance policies.
Real Knowledge Comes Only From Experience

boglerdude
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Re: When to have an Umbrella insurance policy

Post by boglerdude » Mon Aug 26, 2019 10:01 pm

> plaintiffs do routinely reject $1MM umbrella policy limits settlements

Links? The Hogan case was street racing, foreseeable negligence which we can choose to avoid. Still haven't heard details of cases where there was no foreseeable negligence, 1M settlement rejected, and personal assets actually taken. Sounds like you recommend everyone have 5M? And no dash cams?

UALflyer
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Re: When to have an Umbrella insurance policy

Post by UALflyer » Tue Aug 27, 2019 9:30 am

boglerdude wrote:
Mon Aug 26, 2019 10:01 pm
> plaintiffs do routinely reject $1MM umbrella policy limits settlements

Links?
You are not going to find most of this type of information by googling. What you can do is call up some of the personal injury law firms in your area that specialize in high dollar catastrophic personal injury cases, explain that you're trying to decide how large your umbrella policy should be and then ask them about their experience pursuing individual defendants' substantial exposed assets in catastrophic injury cases the value of which far exceeded $1MM. Some of them won't take your phone call seriously, but if you don't sound like a nutcase, a number of them should be more than happy to talk to you.
The Hogan case was street racing, foreseeable negligence which we can choose to avoid.
You keep using the term "foreseeable negligence" in various threads without understanding it. The concept of foreseeability or "proximate cause" is a highly technical legal concept. Without getting into the weeds (and the overall analysis also depends on the specific jurisdiction), suffice it to say that foreseeability or proximate cause are as likely to be raised as a defense as they are to be used against a defendant.

Regardless, in auto accident cases, which is the vast majority of the personal injury cases that umbrella insurers see, foreseeability or proximate cause tends to not be a significant factor, as those types of claims tend to have a fairly clear and direct cause and effect.

Based on the news reporting, the plaintiff in the Hogan case was not wearing a seatbelt and may've been a participant in the activities, so there were significant defenses. Yet, the settlement was apparently in the $5MM range, which would mean that $4.5MM came from Hogan's personal assets.
Still haven't heard details of cases where there was no foreseeable negligence, 1M settlement rejected, and personal assets actually taken.
Once again, the way that you're using the term "foreseeable negligence" doesn't make any sense and neither does your statement above. If the defendant's actions are deemed to not be the proximate cause of the plaintiff's injuries, then you don't get to the question of damages, as the defendant wouldn't be liable for them.

Accidents happen, sometimes with rather catastrophic consequences. Even the most responsible, most careful drivers have at fault accidents. In relative terms, most of them are not that serious, but unfortunately, very serious and even deadly accidents aren't particularly uncommon. You don't need to be engaged in high risk activities to be involved in a very serious at fault accident.
Sounds like you recommend everyone have 5M?
As I mentioned in two previous posts above, the vast majority of the population out there is largely judgment proof, as they just don't have all that much money, have modest income streams and whatever assets they do have are in 401(k)'s and the like, which are protected from judgment creditors. So, if you don't have much exposure, the decision on how much liability insurance to purchase is very different from that of people with substantial exposed assets and/or substantial exposed future income streams.

Most people out there don't have umbrella policies. A lot of them actually have very low liability limits as well, as their liability exposure is very low or virtually non-existent. If you aren't in that category and have substantial exposed assets, then you can't make a decision about liability insurance limits without factoring in your potential liability exposure.
And no dash cams?
Dash cams can protect you against clearly fraudulent claims, but those tend to be fairly low value nuisance claims anyway, which don't have anything to do with this conversation about umbrella policies. In disputed liability situations, dash cams can also help resolve those types of disputes, but, depending on what the footage shows, they may help you, or may undercut your defense.

I just read about an auto accident that went to trial and resulted in a 7 figure verdict. There was dash cam footage, and both sides argued that the footage favored them. At the end of the day, the jury used the defendant's own dash cam footage to find against him.

boglerdude
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Re: When to have an Umbrella insurance policy

Post by boglerdude » Tue Aug 27, 2019 9:05 pm

^ Link to that story? Also, please share the evidence & probability analysis that you used to calculate how much liability to purchase for yourself

UALflyer
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Re: When to have an Umbrella insurance policy

Post by UALflyer » Wed Aug 28, 2019 8:20 am

boglerdude wrote:
Tue Aug 27, 2019 9:05 pm
^ Link to that story?
That article, just like most articles like it, is behind a paywall. As I mentioned above, you aren't going to find the articles that you're looking for by googling. Most people have no interest in these types of articles, so regular news sources do not publish them.
Also, please share the evidence & probability analysis that you used to calculate how much liability to purchase for yourself
Evidence and probability analysis? This isn't math, and there's no neat formula out there for doing it. I have, however, already mentioned a lot of elements of the overall analysis above, which isn't anything groundbreaking.

When I entered "foreseeable negligence" into the BH searchbox, I got two pages of threads in which you, and only you, used this phrase in a way that is either meaningless or just plain wrong. For instance, you've made statements, such as "Cases always settle because its hard to convince a jury there was foreseeable negligence. eg texting" (viewtopic.php?t=255585); "The important thing is foreseeable negligence is avoidable. "Accidents" are not foreseeable" (viewtopic.php?t=273443); "What you dont want is your "adversary" or a witness claiming you were texting or some form of foreseeable negligence (required to win huge lawsuits)" (viewtopic.php?t=284629). I cannot quite discern from your posts what specific concept you're talking about, but the way that you've phrased your statements makes them just plain wrong.

I initially thought that you were trying to use the phrase "foreseeable negligence" as a euphemism for gross negligence or reckless conduct, but even in that case your statements would still be just plain wrong. Although a finding of gross negligence and/or recklessness can result in punitive damages, you don't have to have acted in a grossly negligent or reckless manner to find yourself on the wrong side of a 7 figure damage award. There have been plenty of 7 figure simple negligence cases out there where an individual rather than a huge corporation was responsible. If you have substantial exposed assets and/or a substantial exposed future income stream, then you are a proverbial deep pocket, which makes you a larger and more attractive target for these types of cases.

Pete3
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Re: When to have an Umbrella insurance policy

Post by Pete3 » Wed Aug 28, 2019 12:58 pm

justsomeguy2018 wrote:
Sat Aug 24, 2019 10:28 am
Do you recommend having an Umbrella policy at all times?

Or only once you get to a certain level of assets/net worth?

If so, at what level (dollar amount wise) is it advisable to take out an Umbrella policy, and how big of a policy (dollar wise) should you take out? e.g. if you have $500,000 in assets do you recommend having a $1M umbrella policy?
Your level of umbrella protection should have nothing to do with how much you have in assets, it only depends on the risk of having a large judgement against you.

Of course if you have minimal assets (judgement proof) then you don't need it at all but beyond that your should base the amount of coverage on what kind of risk you could face (teenage driver is classic example), not on your net worth.

Many people think of insurance in terms of things like homeowners insurance where the coverage level is based on the asset you are insuring - with umbrella insurance you are protecting against a judgement against you.

For instance getting a 10M umbrella policy because you have 10M net worth does not make any sense - the two things have nothing to do with each other.

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Re: When to have an Umbrella insurance policy

Post by TexasPE » Wed Aug 28, 2019 1:14 pm

Pete3 wrote:
Wed Aug 28, 2019 12:58 pm

Your level of umbrella protection should have nothing to do with how much you have in assets, it only depends on the risk of having a large judgement against you.
To me there is another issue - my potential culpability in someone's life-long disability/medical expenses/ lost income due to my actions (or inactions). I know people who are disabled for life in difficult circumstances due to accidents, and I rest a little easier at night knowing that should the unthinkable occur, resources would be available to assist the injured party. Umbrella insurance partially addresses this concern. YMMV.
At 20: I cared what everyone thought about me | At 40: I didn't give a damn what anyone thought of me | Now that I'm 60: I realize that no one was really thinking about me at all | Winston Churchill (?)

miamivice
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Re: When to have an Umbrella insurance policy

Post by miamivice » Wed Aug 28, 2019 1:23 pm

siamond wrote:
Sun Aug 25, 2019 6:53 am
OP, do pay attention to this excellent point made by Call_Me_Op and the text I emphasized. There is a lot of confusion about this topic, but it is NOT about your total net worth, definitely not. If the bulk of your net worth is made of a 401k (or a corresponding roll-over IRA) and you have a declaration of homestead for your house that covers most of its value (it's worth $500k in MA), then there is little point having an umbrella insurance.
Part of insurance is peace of mind. If you are sued or potentially sued for a large amount of money, you'll worry endlessly about the safety of your retirement assets. If you Google whether 401ks are exposed or not, you will find conflicting information. Having a large enough umbrella insurance policy helps bring peace of mind.

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siamond
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Re: When to have an Umbrella insurance policy

Post by siamond » Wed Aug 28, 2019 4:53 pm

miamivice wrote:
Wed Aug 28, 2019 1:23 pm
siamond wrote:
Sun Aug 25, 2019 6:53 am
OP, do pay attention to this excellent point made by Call_Me_Op and the text I emphasized. There is a lot of confusion about this topic, but it is NOT about your total net worth, definitely not. If the bulk of your net worth is made of a 401k (or a corresponding roll-over IRA) and you have a declaration of homestead for your house that covers most of its value (it's worth $500k in MA), then there is little point having an umbrella insurance.
Part of insurance is peace of mind. If you are sued or potentially sued for a large amount of money, you'll worry endlessly about the safety of your retirement assets. If you Google whether 401ks are exposed or not, you will find conflicting information. Having a large enough umbrella insurance policy helps bring peace of mind.
I did read quite some online material and my understanding is that ERISA-protected accounts like 401k accounts are properly protected, I didn't see any ambiguity about that. If you've seen something to the contrary, please share? The case is admittedly less clear for Rollover IRAs; it really should be common sense that it works the same, but online material is less clear cut, and... yeah, in court, basic fairness & common sense doesn't always prevail. And then per-state regulations are diverse and often not too clear.

I do understand your perspective, and if it brings you peace of mind to extend the umbrella, by all means, go for it. Personally, what raises my blood pressure is not the fear of litigation, it is the fact that the lawyers & insurance lobbies are manipulating our emotions big time and created this umbrella insurance concept totally out of thin air. I did cave to the scare tactics and I have an umbrella, but every time I pay it (or see a thread about the topic), I feel ripped off and I get worked up... This is just me and my own perspective on 'peace of mind'... If I could get full clarity about MA laws and if my taxable account was less sizable, I would probably HAPPILY can the umbrella insurance and I'd feel much better...

boglerdude
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Re: When to have an Umbrella insurance policy

Post by boglerdude » Wed Aug 28, 2019 7:17 pm

> That article, just like most articles like it, is behind a paywall. > plenty of 7 figure simple negligence cases

Well then, lets take a look at what actually happened. Post some details & we'll find or buy the articles. Specifically no "forseeable" negligence, 1M settlement offer rejected, followed by lost trial and seized assets. https://www.jrlawfirm.com/blog/foreseeability/

UALflyer
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Re: When to have an Umbrella insurance policy

Post by UALflyer » Wed Aug 28, 2019 7:45 pm

boglerdude wrote:
Wed Aug 28, 2019 7:17 pm
Specifically no "forseeable" negligence, 1M settlement offer rejected, followed by lost trial and seized assets. https://www.jrlawfirm.com/blog/foreseeability/
You are continuing to repeat terms without understanding them. As I already mentioned above, if the defendant's actions are deemed to not be the proximate cause of the plaintiff's injuries, you don't get to the question of damages, as the defendant wouldn't be liable for them. As I also explained, in auto accident cases, which is the vast majority of the personal injury cases that umbrella insurers see, foreseeability or proximate cause tends to not be a significant factor, as those types of claims tend to have a fairly clear and direct cause and effect.

In other words, your understanding of the term "foreseeable" is not even close to the way that it is used in tort law.

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