umbrella policy

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bb
Posts: 326
Joined: Wed Apr 25, 2007 10:04 pm

umbrella policy

Post by bb »

I was playing sqush this week and ran over my opponent
(should not be part of the game - my mistake). Someone
ask me what would happen if I got sued. This got me
thinking that was a legitimate concern. My insurance
agent (state farm) stated I could get an umbrella policy
in addition to a renters/home owners policy to cover
this scenario.

Does anyone agree this would be a good thing? It's not
too expensive. Any fine print I need to be aware of?

Thanks,

Brian
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FNK
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Post by FNK »

Brian,

Start by perusing this thread: http://www.bogleheads.org/forum/viewtopic.php?t=41505
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ofcmetz
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Post by ofcmetz »

I'm able to shelter most assets from a lawsuit because most of my investments are in 401K or IRA type accounts.

That being said, I think it's wise to have maxed out auto liability and even at least one million umbrella policy. I pay about $250 though Liberty Mutual for the umbrella coverage. It's like you spent your money on sleeping pills. ;)
Never underestimate the power of the force of low cost index funds.
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ThePrune
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Location: Midland, MI

Post by ThePrune »

+1 to ofcmetz's advice. My 1 million umbrella policy through Continental is only $155 annually.
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dhodson
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Post by dhodson »

to make this more affordable, what i recommend doing is increasing your deductible for your home and auto to reduce cost but offset this savings with a higher total coverage and an umbrella policy. this assumes you are not accident prone. for me if i dont have an accident within 4-5 years then i save money by increasing my deductible.
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dm200
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Post by dm200 »

ofcmetz wrote:I'm able to shelter most assets from a lawsuit because most of my investments are in 401K or IRA type accounts.

That being said, I think it's wise to have maxed out auto liability and even at least one million umbrella policy. I pay about $250 though Liberty Mutual for the umbrella coverage. It's like you spent your money on sleeping pills. ;)
You may not be as "protected" as you think. IRAs may have, depending on state law, much less protection from judgments. I had $300,000 taken from an IRA on a legal judgment. I did not go bankrupt.
Topic Author
bb
Posts: 326
Joined: Wed Apr 25, 2007 10:04 pm

Post by bb »

I noticed that the umbrella seems to cover bodily injury obviously not tied to a particular property but still requires an underlying home owners/renters policy. Does a home owners/renters policy cover bodily injury on your property and also off your property?
Van
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Joined: Wed Oct 27, 2010 9:24 am

Post by Van »

Check out 2 million vs. 1 million. It probably won't cost a whole lot more.

I've carried 5 million for many years and consider it money well spent.
WatchinU
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Joined: Wed Jul 13, 2011 2:45 pm

Post by WatchinU »

my financial adviser suggested that I purchase an umbrella policy. he said is cheap and a prudent thing to do. its $200 premium per year for $2M coverage with state farm. i have my auto insured with them but not my house.
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Quasimodo
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Post by Quasimodo »

bb wrote:I noticed that the umbrella seems to cover bodily injury obviously not tied to a particular property but still requires an underlying home owners/renters policy. Does a home owners/renters policy cover bodily injury on your property and also off your property?
One example of off-premises liability coverage under your homeowners is if you accidentally hit someone with a golf ball at the golf course and they sue you. That would be covered by a homeowners liability policy.

John
Many wealthy people are little more than janitors of their possessions. | | Frank Lloyd Wright, architect (1867-1959)
SimonJester
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Post by SimonJester »

ofcmetz wrote:I'm able to shelter most assets from a lawsuit because most of my investments are in 401K or IRA type accounts.

That being said, I think it's wise to have maxed out auto liability and even at least one million umbrella policy. I pay about $250 though Liberty Mutual for the umbrella coverage. It's like you spent your money on sleeping pills. ;)

You can have a judgment against you and they could petition the court to garnish future wages, that is something you cannot shelter against (unless you are in an all cash business)...
wilked
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Re: umbrella policy

Post by wilked »

I just picked up umbrella insurance (cost $250/yr for $1MM) based on this thread, thanks!
JimmyD
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Re: umbrella policy

Post by JimmyD »

Interesting thread.

Would it be advisable for a married couple to pick up a policy for each spouse?
obgraham
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Re: umbrella policy

Post by obgraham »

We have a lot of "target risk" folks on this board. Medical, legal, financial professionals, etc.

I don't think it is wise not to have an umbrella policy.

After a relatively minor auto accident, I was sued. Insurance handled everything, but the potential risk beyond my usual auto insurance was clear.
tacster
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Location: Limbo.

Re:

Post by tacster »

SimonJester wrote:
ofcmetz wrote:I'm able to shelter most assets from a lawsuit because most of my investments are in 401K or IRA type accounts.

That being said, I think it's wise to have maxed out auto liability and even at least one million umbrella policy. I pay about $250 though Liberty Mutual for the umbrella coverage. It's like you spent your money on sleeping pills. ;)

You can have a judgment against you and they could petition the court to garnish future wages, that is something you cannot shelter against (unless you are in an all cash business)...
Delete - didn't notice zombie thread date.
Last edited by tacster on Mon Apr 06, 2015 12:17 pm, edited 1 time in total.
INSERT PITHY QUOTE HERE
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LiveSimple
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Re: umbrella policy

Post by LiveSimple »

jimday1982 wrote:Interesting thread.

Would it be advisable for a married couple to pick up a policy for each spouse?
Umbrella policy is for the household ? Am I mistaken.
epitomist
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Re: umbrella policy

Post by epitomist »

Resurrecting 4 year old threads is not a good idea in my opinion. Now everyone is replying to people from 4 years ago and it's unlikely the original people will even see it.

Asset protection is state specific. In my state, you can't garnish wages for anything but back child support and back taxes so wages are protected from almost all judgments against you.

As for IRA protection, dm200 seems to come from Virginia which only protects up to $25,000 in retirement accounts. In my state, it protects up to $1MM.
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