how does Personal Umbrella Insurance work?

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boglerocks
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how does Personal Umbrella Insurance work?

Post by boglerocks »

I thought personal umbrella insurance would cover you for any or just about any liability but now I'm not sure if it only extends the limits of your underlying home and vehicle policies. Which way does it work?
smackboy1
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Re: how does Personal Umbrella Insurance work?

Post by smackboy1 »

There is no insurance that would cover "just about any liability". Umbrella is excess liability coverage which means that it only kicks in when your primary insurance policy is exceeded. Typically it's excess liability coverage for homeowners and auto insurance. Homeowners and auto do not cover things like professional negligence.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.
HomeStretch
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Re: how does Personal Umbrella Insurance work?

Post by HomeStretch »

Policy coverage varies by insurer so you’d have to ask.

My policy primary increases my coverage limits for home and automobile. As written, the policy doesn't cover watercraft, rentals, business liability, etc. It possibly could cover more but I don’t need it. If I did, I would consult with an insurance broker and the carrier.
IowaFarmBoy
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Re: how does Personal Umbrella Insurance work?

Post by IowaFarmBoy »

As with almost anything insurance related, the answer will depend on the laws of your state and the wording of the specific policy you buy.

In addition to excess liability for your home and auto, "most" policies add some additional protection for things like libel, slander, invasion of privacy, etc. A policy may provide coverage for watercraft if the proper underlying coverage is maintained but I expect it would increase the premium. It wouldn't cover things like professional liability, running a business from your home, etc.

I would talk to your agent or your insurance company to get a solid understanding of what their policy would cover.
Daryl
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Re: how does Personal Umbrella Insurance work?

Post by Daryl »

Sometimes an example can be helpful.

Say a person is at-fault in an auto accident and causes $2M in damages. First their auto insurance pays, up to the limits of the policy. Lets assume the person has $500K in auto liability limits. There is $1.5M remaining to be paid. Next they might have a $1M umbrella policy. The umbrella insurance would pay for the damages / losses up to the policy limit - $1M. There is still $0.5M in damages not covered by the combined auto+umbrella limits, so the Insured is responsible for paying the balance.

I don't have access to information about the frequency/severity of claims >$1.5M. My assumption is that these are low probability events, but life changing for all involved.
obgraham
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Re: how does Personal Umbrella Insurance work?

Post by obgraham »

I suspect the vast majority of high dollar payouts come after significant litigation.
The main thing about umbrella insurance is that they provide your defense, as it is in their interest to minimize your liability losses.

What you have to find out is if your policy has a "right to settle" clause, or if the settlement decision is up to you.
Tal-
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Re: how does Personal Umbrella Insurance work?

Post by Tal- »

Daryl wrote: Fri Nov 01, 2019 5:29 pm Sometimes an example can be helpful.

Say a person is at-fault in an auto accident and causes $2M in damages. First their auto insurance pays, up to the limits of the policy. Lets assume the person has $500K in auto liability limits. There is $1.5M remaining to be paid. Next they might have a $1M umbrella policy. The umbrella insurance would pay for the damages / losses up to the policy limit - $1M. There is still $0.5M in damages not covered by the combined auto+umbrella limits, so the Insured is responsible for paying the balance.

I don't have access to information about the frequency/severity of claims >$1.5M. My assumption is that these are low probability events, but life changing for all involved.
This is an excellent example.

Just to add my personal bias, I find an umbrella policy to be the most insurancey of all insurance tools. It's inexpensive and provides massive coverage for the unlikely, but catastrophic bad event. At it's core, this is exactly what insurance should be (in my opinion).

If you go this route, be sure to price multiple coverage amounts. The price difference between 1M and 3M may be very small, and you are likely to get far better coverage (better attorneys, higher coverage) with the 3M plan.

Final note - there is a low probability of needing these plans, but not as low as you might think. There is a 1% chance per year that you'll be the party of an auto lawsuit involving bodily harm. While I don't know what percent of these get into the million dollar range, even if it's 1/100, it means that you have a .1% risk per year, or around a 1% per decade. And that's a real risk.

https://www.caniretireyet.com/how-much- ... -you-need/

https://www.caniretireyet.com/how-much- ... -you-need/
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earlywynnfan
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Re: how does Personal Umbrella Insurance work?

Post by earlywynnfan »

Just paying my umbrella policy today. I inquired about upping from $1m to $3m, for my it would increase the price from $310/yr to $589/yr.
557880yvi
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Re: how does Personal Umbrella Insurance work?

Post by 557880yvi »

Not sure if it was mentioned in the posts, but some cases the underlying insurances over which "Umbrella" policies cover, can have certain coverage limits reduced, saving you money on the underlying insurance. For example, we have an Umbrella policy covering our homeowner's and auto insurance which previously had high liability limits. After adding the Umbrella, we reduced the limits to the minimum required by the Umbrella policy (and our state). The money saved paid for a good part of the Umbrella.
Teague
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Re: how does Personal Umbrella Insurance work?

Post by Teague »

In my understanding, one thing insurance will not cover is anything you do intentionally. For example, an armed assailant attacks you or your family. You defend by shooting/beating/otherwise harming the assailant to incapacitate them. The assailant is convicted and goes to jail, or the morgue, but he/she or their family sue you civilly for bodily harm to the assailant.

My understanding is that no insurance can cover your actions because, even though quite reasonable, your actions against the assailant were not unintentional.

Take the above with some grains of salt as I learned of this by reading Internet forums, and we all know how that can go.
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simas
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Re: how does Personal Umbrella Insurance work?

Post by simas »

Teague wrote: Sat Nov 02, 2019 11:18 am In my understanding, one thing insurance will not cover is anything you do intentionally. For example, an armed assailant attacks you or your family. You defend by shooting/beating/otherwise harming the assailant to incapacitate them. The assailant is convicted and goes to jail, or the morgue, but he/she or their family sue you civilly for bodily harm to the assailant.

My understanding is that no insurance can cover your actions because, even though quite reasonable, your actions against the assailant were not unintentional.

Take the above with some grains of salt as I learned of this by reading Internet forums, and we all know how that can go.
if you are worried about this, search 'castle doctrine' in google and check what your state laws are. this should be covered in any justifiable use of force class you take which is component of every carry permit program I know of. i.e. in my state (IL) the stature is clear
https://codes.findlaw.com/il/chapter-72 ... 5-7-1.html

§ 7-1.  Use of force in defense of person.

(a) A person is justified in the use of force against another when and to the extent that he reasonably believes that such conduct is necessary to defend himself or another against such other's imminent use of unlawful force.  However, he is justified in the use of force which is intended or likely to cause death or great bodily harm only if he reasonably believes that such force is necessary to prevent imminent death or great bodily harm to himself or another, or the commission of a forcible felony.
(b) In no case shall any act involving the use of force justified under this Section give rise to any claim or liability brought by or on behalf of any person acting within the definition of “aggressor” set forth in Section 7-4 of this Article, or the estate, spouse, or other family member of such a person, against the person or estate of the person using such justified force, unless the use of force involves willful or wanton misconduct.
CZjc1330
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Re: how does Personal Umbrella Insurance work?

Post by CZjc1330 »

To the point I rec it. It's not expensive and as the kids say: Life happens. Most people can get by w/ 1 million. But if you are high net worth, over 10 Million, go for the 3 M coverage.
I was an academic administrator for nearly 50 years and saw multiple examples of where it helped people. We live in "a Sue Crazy" society. Buy some peace of mind!
Topic Author
boglerocks
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Re: how does Personal Umbrella Insurance work?

Post by boglerocks »

That's exactly what I want to do but I guess I need to read each policy to understand what I'm covered for which sounds like a really big task. I'd like coverage beyond real estate and automobiles although I don't have anything specific in mind. As you said, life happens.
simas
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Re: how does Personal Umbrella Insurance work?

Post by simas »

boglerocks wrote: Sat Nov 02, 2019 12:32 pm That's exactly what I want to do but I guess I need to read each policy to understand what I'm covered for which sounds like a really big task. I'd like coverage beyond real estate and automobiles although I don't have anything specific in mind. As you said, life happens.
you are correct - so read it. no amount of talk on internet forum replace actually reading and understanding the contract you and insurance company is entering.. umbrella liability insurance is cheap to cover very low probability high impact events. in my opinion a very good allocation of resources given risks involved.
Teague
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Re: how does Personal Umbrella Insurance work?

Post by Teague »

boglerocks wrote: Sat Nov 02, 2019 12:32 pm That's exactly what I want to do but I guess I need to read each policy to understand what I'm covered for which sounds like a really big task. I'd like coverage beyond real estate and automobiles although I don't have anything specific in mind. As you said, life happens.
Interestingly, my umbrella policy (via Geico) was surprisingly concise and easy to read. Way simpler than my home or auto policy.
Semper Augustus
Northern Flicker
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Re: how does Personal Umbrella Insurance work?

Post by Northern Flicker »

Your personal umbrella policy might cover some things not covered by home or auto but surely does not cover all possible personal liabilities.

Some, if not all, actually work like an ultra-high deductible policy where the home and auto serve to lower the deductible to a low level. This means that there can be liabilities where you are on the hook for the first X number of dollars much higher than your normal home of auto deductible, say $500K or $1M and the umbrella kicks in after that.

An example would be if you are driving someone else’s car in a state where liability insurance goes with the car not the driver. If the owner of the car only carries the legal minimum in insurance and you are sued say for $2M after an accident. There would be a gap between the car owner’s insurance coverage and when your umbrella kicks for which you would be on the hook but most umbrella policies would still cover the tail.
Risk is not a guarantor of return.
Teague
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Re: how does Personal Umbrella Insurance work?

Post by Teague »

simas wrote: Sat Nov 02, 2019 12:07 pm
 In no case shall any act involving the use of force justified under this Section give rise to any claim or liability brought by or on behalf of any person acting within the definition of “aggressor” set forth in Section 7-4 of this Article, or the estate, spouse, or other family member of such a person, against the person or estate of the person using such justified force, unless the use of force involves willful or wanton misconduct.[/b]
Well, I'm no expert, but I'd guess in that case the aggressor or family would claim willful or wanton misconduct occurred.

Mr Teague, could you please tell the jury why you fired more than once, without waiting to see the effect of the first, potentially disabling or deadly, shot at this young churchgoing man who was just turning his life around? And could you also tell the jury why you were using hollow point bullets, known to be more lethal, brutal, and damaging than jacketed bullets? And Mr Teague, did you or did you not fire first at this upstanding gentleman who was simply heading to the target range with his pistol, and due to a medical condition, became confused and so entered your house? Did you employ any non-lethal means first, as police are instructed to do, before brutally assassinating my client, devastating his entire family and community? Mr Teague, could you tell us why you fired your .40 caliber weapon, known to be particularly deadly, when law enforcement in your area is normally equipped with potentially less lethal 9mm pistols?

One would have to pay to defend against such a suit, no matter the merits of the case. Umbrella insurance won't pay for that. And I believe a civil suit is determined by a simple "preponderance of the evidence" i.e. 50.01%, rather than the higher standard applied to a criminal case.
Semper Augustus
CZjc1330
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Re: how does Personal Umbrella Insurance work?

Post by CZjc1330 »

Yes, 'tis good to read. I too found GEICO umbrella simple and to the point. Check them out; and purchase, say one M today. You can always add more. At least you will be covered for the most basic problems. Then study other policies -- it will take time if you want to be very careful, thoughtful, etc. Frankly, I think one can get paralysed by studying too much. But we are all different with different realities. If you have a lot ($) to protect buy 3 M. I really think that will cover most of us very nicely. But do what makes you comfortable.
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neurosphere
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Re: how does Personal Umbrella Insurance work?

Post by neurosphere »

Teague wrote: Sat Nov 02, 2019 2:13 pm Well, I'm no expert, but I'd guess in that case the aggressor or family would claim willful or wanton misconduct occurred.
The fact that Umbrella insurance might not cover every particular situation does not negate the value of Umbrella Insurance. I wonder if there is willful or wanton misconduct insurance. :D
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".
Teague
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Re: how does Personal Umbrella Insurance work?

Post by Teague »

neurosphere wrote: Sat Nov 02, 2019 2:24 pm
Teague wrote: Sat Nov 02, 2019 2:13 pm Well, I'm no expert, but I'd guess in that case the aggressor or family would claim willful or wanton misconduct occurred.
The fact that Umbrella insurance might not cover every particular situation does not negate the value of Umbrella Insurance.
Oh, I absolutely agree. Wouldn't want to be without it!
Semper Augustus
simas
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Re: how does Personal Umbrella Insurance work?

Post by simas »

Teague wrote: Sat Nov 02, 2019 2:13 pm
simas wrote: Sat Nov 02, 2019 12:07 pm
 In no case shall any act involving the use of force justified under this Section give rise to any claim or liability brought by or on behalf of any person acting within the definition of “aggressor” set forth in Section 7-4 of this Article, or the estate, spouse, or other family member of such a person, against the person or estate of the person using such justified force, unless the use of force involves willful or wanton misconduct.[/b]
Well, I'm no expert, but I'd guess in that case the aggressor or family would claim willful or wanton misconduct occurred.
sure, you/them/family/whoever can claim whatever they want including that your neighbor puts her superhero costume , grows horns at full moon , and abducts you to probe all by her wholesome on her secret alien ship. people can make whatever claims they want. However, if you claiming something, the burden is on you to prove it. pay for lawyers, for expert witnesses, go on front of the judge, etc. it is far more difficult when internet trolls assume, and legal system also does not take kindly to attempts to waste its resources (it is busy enough), and lawyers do not work for free.

if you are so hang up on use of force, take an actual class, don't waste your time on "internet forums". learn how the process works, learned the attitudes of your jurisdiction (country, parish, whatever), and the laws of your state. get a retainer agreement with good/recommended attorney and have their number on dial if it comes to it. well informed = well prepared. know your rights, know how the system works, and generally avoid bad situations (don't go to stupid places with stupid people to do stupid things).

- if aggressor broke into your home, uninvited , was already in the process of committing a felony, especially if this is happening night time , vast majority of the times you will not be charged in almost all jurisdictions. no charges, no defense to mount, near zero chance anybody can have any judgement against you in that case.
- now, you may have fortune of living in jurisdiction hostile to your ability to defend your life (think very big cities and generally areas leaning left). you may or may not face charges depending on the facts of the case and attitude of the DA office. when you mount your defense and if successful (justifiable use of force), no civil liability (as stated above). good luck proving anything in civil case where state already cleared you fully , massive burden on claimant to prove their case . And if you did not follow the 'don't do stupid things ' rule above then umbrella liability insurance is not going to be on the top of your concerns as you would be dealing with wrath of the people of your state (aka the law)

not a lawyer, not planning to be one, just a person who had to go through repeated training on use of force and legal process in my state..
Teague
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Re: how does Personal Umbrella Insurance work?

Post by Teague »

^ Okey-dokey. :wink:
Semper Augustus
uberdoc
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Re: how does Personal Umbrella Insurance work?

Post by uberdoc »

Once I dropped a water bottle from departure level to the arrival hall at an airport. Luckily it did not hit anyone. I think umbrella will cover you for any damages resulting from situations like these.
simas
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Re: how does Personal Umbrella Insurance work?

Post by simas »

Teague wrote: Sat Nov 02, 2019 2:13 pm

Mr Teague, could you please tell the jury why you fired more than once, without waiting to see the effect of the first, potentially disabling or deadly, shot at this young churchgoing man who was just turning his life around? And could you also tell the jury why you were using hollow point bullets, known to be more lethal, brutal, and damaging than jacketed bullets? And Mr Teague, did you or did you not fire first at this upstanding gentleman who was simply heading to the target range with his pistol, and due to a medical condition, became confused and so entered your house? Did you employ any non-lethal means first, as police are instructed to do, before brutally assassinating my client, devastating his entire family and community? Mr Teague, could you tell us why you fired your .40 caliber weapon, known to be particularly deadly, when law enforcement in your area is normally equipped with potentially less lethal 9mm pistols?
I had a good laugh at the above. yes, may be this works in the Law and Order (or whatever) series for entertainment purposes, but not in real life. you are not police, you are not instructed or trained as such, you have completely different standards that apply to you. you are justified in doing whatever you need to do to stop imminent threat to life and limb of self and others. period. in cases where it is in your home after felony (forcible entry), any of the above may make for entertaining view on TV but would not survive in any real courtroom. no one ever expects for you to read felons mind ('turning life around'), whether he (statistically it would be male) loved his mama or 'was a good boy'. no one expects for you to automagically detect felons mental state, drug combination, etc. was there a reasonable situation of jeopardy (would reasonable person believe in your situation that treat had both ability and opportunity for person to inflict harm to health or life?) ? yes? next.

but all of this is of-topic. unless you go into situations where harm is present constantly, this is statistically very very low probability and even then law is heavily on your side.
carruthers209
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Re: how does Personal Umbrella Insurance work?

Post by carruthers209 »

Umbrella insurance is recommended for landlords. It can protect them from renter's negligence and other expensive events. We've had it for years, just recently upped our coverage since it is a very reasonable expense for the amount of coverage.
TravelforFun
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Re: how does Personal Umbrella Insurance work?

Post by TravelforFun »

With the umbrella policy, I feel more confident when I say no to the agent who tries to sell me car rental insurance coverage.

TravelforFun
tibbitts
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Re: how does Personal Umbrella Insurance work?

Post by tibbitts »

carruthers209 wrote: Sat Nov 02, 2019 7:04 pm Umbrella insurance is recommended for landlords. It can protect them from renter's negligence and other expensive events. We've had it for years, just recently upped our coverage since it is a very reasonable expense for the amount of coverage.
I would think that would be business insurance and not covered by a normal umbrella policy?
Northern Flicker
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Re: how does Personal Umbrella Insurance work?

Post by Northern Flicker »

Rental property can be covered on a personal umbrella policy up to a limit on number of units. Commercial umbrella policies are available when number of units exceeds the limit for a personal umbrella.
Risk is not a guarantor of return.
ncbill
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Re: how does Personal Umbrella Insurance work?

Post by ncbill »

Teague wrote: Sat Nov 02, 2019 11:18 am In my understanding, one thing insurance will not cover is anything you do intentionally. For example, an armed assailant attacks you or your family. You defend by shooting/beating/otherwise harming the assailant to incapacitate them. The assailant is convicted and goes to jail, or the morgue, but he/she or their family sue you civilly for bodily harm to the assailant.

My understanding is that no insurance can cover your actions because, even though quite reasonable, your actions against the assailant were not unintentional.

Take the above with some grains of salt as I learned of this by reading Internet forums, and we all know how that can go.
That's why you need to check coverage...my umbrella policy specifically covers an insured using force in the "defense of self or others."

State law also helps...here no civil recovery is allowed if the plaintiff is injured or killed in the commission of a criminal act.
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