Protection of Assets with Auto/Home Insurance Levels

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Hues10
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Protection of Assets with Auto/Home Insurance Levels

Post by Hues10 »

I recently got married (for 2nd time), and we both come into the marriage with sizeable enough portfolios with me having approx. double of what she has. Yes, we did the pre-nup thing, though I am not Bill Gates, I am not naive on what could happen. My question is really on the levels of car/home insurance you all have with multi-six figure net worths. Currently have auto policy with $300K limit and $100k property. The Home I am not quite sure the liability limit I have. At what point do I up the coverage limits to $1M and then consider purchasing umbrella for more. I don't want to spend $10k per year on these extreme insurance costs, but on the other hand, I don't want to be subject to some frivolous lawsuit because I do have money. Why is it that if you have something you have worked for your whole life, either the government, or other people want to take it away it seems? Thanks all for your advice and opinions.
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abuss368
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Re: Protection of Assets with Auto/Home Insurance Levels

Post by abuss368 »

Hues10 wrote: Tue May 18, 2021 6:36 am I recently got married (for 2nd time), and we both come into the marriage with sizeable enough portfolios with me having approx. double of what she has. Yes, we did the pre-nup thing, though I am not Bill Gates, I am not naive on what could happen. My question is really on the levels of car/home insurance you all have with multi-six figure net worths. Currently have auto policy with $300K limit and $100k property. The Home I am not quite sure the liability limit I have. At what point do I up the coverage limits to $1M and then consider purchasing umbrella for more. I don't want to spend $10k per year on these extreme insurance costs, but on the other hand, I don't want to be subject to some frivolous lawsuit because I do have money. Why is it that if you have something you have worked for your whole life, either the government, or other people want to take it away it seems? Thanks all for your advice and opinions.
I purchased an Umbrella policy years back. Do it now. Low costs and good to have in place.

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RickBoglehead
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Re: Protection of Assets with Auto/Home Insurance Levels

Post by RickBoglehead »

Hues10 wrote: Tue May 18, 2021 6:36 am I recently got married (for 2nd time), and we both come into the marriage with sizeable enough portfolios with me having approx. double of what she has. Yes, we did the pre-nup thing, though I am not Bill Gates, I am not naive on what could happen. My question is really on the levels of car/home insurance you all have with multi-six figure net worths. Currently have auto policy with $300K limit and $100k property. The Home I am not quite sure the liability limit I have. At what point do I up the coverage limits to $1M and then consider purchasing umbrella for more. I don't want to spend $10k per year on these extreme insurance costs, but on the other hand, I don't want to be subject to some frivolous lawsuit because I do have money. Why is it that if you have something you have worked for your whole life, either the government, or other people want to take it away it seems? Thanks all for your advice and opinions.
There is no need to up the individual policies to a $1 million level before taking an umbrella policy, your insurance company can best advise.

As far as getting an umbrella policy, I would have had one before getting married with those asset levels.
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climber2020
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Re: Protection of Assets with Auto/Home Insurance Levels

Post by climber2020 »

The insurance you're describing should not cost $10,000 per year.

My umbrella policy is under $300 per year for 2 million in coverage. There were some requirements for home and auto coverage before the umbrella was put into place. Talk to your insurance company and they'll tell you what those requirements are.
boglegirl
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Re: Protection of Assets with Auto/Home Insurance Levels

Post by boglegirl »

Hues10 wrote: Tue May 18, 2021 6:36 am ... Currently have auto policy with $300K limit and $100k property. The Home I am not quite sure the liability limit I have. At what point do I up the coverage limits to $1M and then consider purchasing umbrella for more. I don't want to spend $10k per year on these extreme insurance costs...
$10k per year?! Have you gotten actual quotes? Our annual cost is about 20% of that with a $500k/$1MM auto liability, $1MM renters liability, and $1MM umbrella. Increasing liability coverage on auto, homeowners, and renters policies doesn't increase the premium much. (going from $300k to $1MM liability on the renters costs exactly $30 per year).

MTA: the total cost for us includes all underlying coverages, not just liability portion. I think you're really over-estimating your costs.
Last edited by boglegirl on Tue May 18, 2021 7:33 am, edited 1 time in total.
daheld
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Re: Protection of Assets with Auto/Home Insurance Levels

Post by daheld »

Hues10 wrote: Tue May 18, 2021 6:36 am I recently got married (for 2nd time), and we both come into the marriage with sizeable enough portfolios with me having approx. double of what she has. Yes, we did the pre-nup thing, though I am not Bill Gates, I am not naive on what could happen. My question is really on the levels of car/home insurance you all have with multi-six figure net worths. Currently have auto policy with $300K limit and $100k property. The Home I am not quite sure the liability limit I have. At what point do I up the coverage limits to $1M and then consider purchasing umbrella for more. I don't want to spend $10k per year on these extreme insurance costs, but on the other hand, I don't want to be subject to some frivolous lawsuit because I do have money. Why is it that if you have something you have worked for your whole life, either the government, or other people want to take it away it seems? Thanks all for your advice and opinions.
1. Umbrella insurance. We pay something like $215/year for $1 million in coverage.

2. Do you mean multi-seven figure net worth?
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riverant
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Re: Protection of Assets with Auto/Home Insurance Levels

Post by riverant »

10k seems too high unless you have bad driving records and/or multiple teens. A few thoughts

- with high income and assets, the primary purpose of insurance is for catastrophes (liability or home being destroyed).

- For most folks here, I would suggest 250/500 coverage for Auto, at least 300k for homeowners, and at least a 1m umbrella. There is zero need to increase the individual policies to 1m liability coverage

- deductibles should be as high as possible, so long as the premium discount is worth it. Most people have 500 deductibles, which basically means you pay for the privilege of filing claims for relatively trivial expenses. I’d suggest at least 1000 for auto and 2500 for home. frankly, making a claim for under 2500 would increase your renewal premium for more than the difference between a 500 and 2500 deductible, for years.

- if your cars are old, consider insuring just liability. You’re on the hook for all repairs or replacements, but if the car is a low enough value that any material accident would total it, it might be economical to just plan to buy a replacement vehicle in the unlikely event of an accident.

- shop around. Your best rate is likely from a direct carrier but it’s up to you if paying for more of a “relationship” is worth it.
boglegirl
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Re: Protection of Assets with Auto/Home Insurance Levels

Post by boglegirl »

TJat wrote: Tue May 18, 2021 7:51 am ...

- For most folks here, I would suggest 250/500 coverage for Auto, at least 300k for homeowners, and at least a 1m umbrella. There is zero need to increase the individual policies to 1m liability coverage
...
We keep our auto coverage as high as we can (500/1000) because of UI coverage which can only be the same as or lower than the policyholder's liability coverage. If my husband were to be in an accident with a driver insured with minimum liability, $30k doesn't go very far to cover lost wages etc. The difference between 300/500 and 500/1000, is less than $3/month.
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