Umbrella Policy: Right amount for $7 mil net worth?

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1CEBITN
Posts: 48
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by 1CEBITN » Mon Jul 02, 2018 1:53 pm

TIAX wrote:
Thu Jun 28, 2018 5:38 pm
1CEBITN wrote:
Thu Jun 28, 2018 12:50 pm
\Also remember one of the biggest, most ridiculous things in our legal system is it is "free" to sue someone. Plaintiff's lawyers don't get paid unless you win typically so anybody can sue you any time over any thing and some sleazy lawyer will take that case just to see if you will settle vs pay your lawyer to defend you (tens of thousands of dollars for a typical civil suit).
That's a pretty simplistic view. Lawyers generally don't take loser cases and, if they do, they'll dismiss them pretty quickly once they see the defendant isn't willing to settle for nuisance value. And to the extent a case is frivolous, a defendant can usually get attorneys' fees from plaintiff.
I think that's a pretty optimistic view based on my experiences. Have you ever been sued frivolously? Have you ever tried to get attorney's fees from the plaintiff in such an instance? Do you know how much that costs? If you look like you have money you are more likely to get sued by someone who has no money and no conscience just for being in the wrong place at the wrong time because it costs them nothing to find a lawyer who will take their case. Someone can punch you in the face just standing there doing nothing and then sue you for starting a fight. They can break into your house and sue you for hitting them with a bat to protect your family. Lawyers take those cases all day long because they get to deal with insurance companies in those cases and personal injury law really doesn't have much to do with facts like a criminal court does, it is totally perception, and a jury normally decides the award which puts the outcome totally up in the air based on the jury's personal experiences. Do you want to guess how often the rich guy wins in a jury trial?

I have seen similar things happen to friends with money on a few occasions and, without their insurance company's lawyers getting involved, they would have been out a 5-figure sum just for the lawyer fees to go through discovery before it even got to trial, irregardless of the outcome of the case. That would be the point the plaintiff's lawyer would be able to tell he had a dud. I had a buddy driving his Mercedes E-class who cut a guy off in traffic inadvertently, just never saw him, the guy proceeds to pull a gun from his door pocket, holds it up so my buddy can see it. My buddy tries to get away from him by making a quick turn from his lane (legally). The guy chases him across a lane of traffic, hitting another car, and then sues my buddy because now he has "back problems." That's a pretty extreme example but the insurance company settled rather than taking their chances in court even though that guy is obviously a whack job (his lawyer is too). OJ was acquitted and still had to pay for wrongful death as another example. No comment on OJ's guilt/innocence but just a data point that criminal law and injury law are not related in all cases. Logic doesn't always apply in a personal injury case.

My point is, get the umbrella, it is cheap and buy more than you think you need because there are a lot of ways you can get sued in this country.

golfCaddy
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by golfCaddy » Mon Jul 02, 2018 5:36 pm

1CEBITN wrote:
Mon Jul 02, 2018 1:53 pm
I have seen similar things happen to friends with money on a few occasions and, without their insurance company's lawyers getting involved, they would have been out a 5-figure sum just for the lawyer fees to go through discovery before it even got to trial, irregardless of the outcome of the case. That would be the point the plaintiff's lawyer would be able to tell he had a dud. I had a buddy driving his Mercedes E-class who cut a guy off in traffic inadvertently, just never saw him, the guy proceeds to pull a gun from his door pocket, holds it up so my buddy can see it. My buddy tries to get away from him by making a quick turn from his lane (legally). The guy chases him across a lane of traffic, hitting another car, and then sues my buddy because now he has "back problems." That's a pretty extreme example but the insurance company settled rather than taking their chances in court even though that guy is obviously a whack job (his lawyer is too). OJ was acquitted and still had to pay for wrongful death as another example. No comment on OJ's guilt/innocence but just a data point that criminal law and injury law are not related in all cases. Logic doesn't always apply in a personal injury case.

My point is, get the umbrella, it is cheap and buy more than you think you need because there are a lot of ways you can get sued in this country.
Did the settlement in this case, exceed the primary auto policy limits? If the settlement was within the primary policy limits, it's not an example of where someone needed an umbrella policy. Sure, if you have minimum limits, it's cheaper for the insurance company to pay out the policy limits than litigate, but no insurance company pays out a 7 figure settlement on a frivolous lawsuit.

elnegativo
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by elnegativo » Mon Jul 02, 2018 9:54 pm

1CEBITN wrote:
Mon Jul 02, 2018 1:53 pm
TIAX wrote:
Thu Jun 28, 2018 5:38 pm
1CEBITN wrote:
Thu Jun 28, 2018 12:50 pm
\Also remember one of the biggest, most ridiculous things in our legal system is it is "free" to sue someone. Plaintiff's lawyers don't get paid unless you win typically so anybody can sue you any time over any thing and some sleazy lawyer will take that case just to see if you will settle vs pay your lawyer to defend you (tens of thousands of dollars for a typical civil suit).
That's a pretty simplistic view. Lawyers generally don't take loser cases and, if they do, they'll dismiss them pretty quickly once they see the defendant isn't willing to settle for nuisance value. And to the extent a case is frivolous, a defendant can usually get attorneys' fees from plaintiff.
I think that's a pretty optimistic view based on my experiences. Have you ever been sued frivolously? Have you ever tried to get attorney's fees from the plaintiff in such an instance? Do you know how much that costs? If you look like you have money you are more likely to get sued by someone who has no money and no conscience just for being in the wrong place at the wrong time because it costs them nothing to find a lawyer who will take their case. Someone can punch you in the face just standing there doing nothing and then sue you for starting a fight. They can break into your house and sue you for hitting them with a bat to protect your family. Lawyers take those cases all day long because they get to deal with insurance companies in those cases and personal injury law really doesn't have much to do with facts like a criminal court does, it is totally perception, and a jury normally decides the award which puts the outcome totally up in the air based on the jury's personal experiences. Do you want to guess how often the rich guy wins in a jury trial?

I have seen similar things happen to friends with money on a few occasions and, without their insurance company's lawyers getting involved, they would have been out a 5-figure sum just for the lawyer fees to go through discovery before it even got to trial, irregardless of the outcome of the case. That would be the point the plaintiff's lawyer would be able to tell he had a dud. I had a buddy driving his Mercedes E-class who cut a guy off in traffic inadvertently, just never saw him, the guy proceeds to pull a gun from his door pocket, holds it up so my buddy can see it. My buddy tries to get away from him by making a quick turn from his lane (legally). The guy chases him across a lane of traffic, hitting another car, and then sues my buddy because now he has "back problems." That's a pretty extreme example but the insurance company settled rather than taking their chances in court even though that guy is obviously a whack job (his lawyer is too). OJ was acquitted and still had to pay for wrongful death as another example. No comment on OJ's guilt/innocence but just a data point that criminal law and injury law are not related in all cases. Logic doesn't always apply in a personal injury case.

My point is, get the umbrella, it is cheap and buy more than you think you need because there are a lot of ways you can get sued in this country.
While there is no screening process for civil suits before they are filed, after they are filed, every state has systems in place for defining "frivolous suits" and methods for quickly getting them dismissed. In Texas, for example, the definition is "no basis in fact or law." If you file such a suit, the defendant can immediately move to have it dismissed and will get it dismissed if it has no basis in fact or law. So, by definition, no one ever wins a frivolous case.

As far as insurance claims go, why would they regularly settle claims that have no basis in fact or law when they know if they just tell you "no" and force you file suit that you will be dismissed? As far as claims adjusting goes, is there occasionally going to be an outlier? Sure. Does it work perfectly every time? Probably not. But there is no epidemic of frivolous lawsuits or frivolous claims being paid.

Civil juries aren't crazy or illogical. They are just like you and me. In fact, they ARE you and me. When they return a verdict - big or small or nothing - it's because they have good reasons based on the evidence they heard in court. This idea that our civil justice system is suffering from existential flaws is propaganda put together by insurance companies and the national chamber because, well, they don't like being on the business end of a fair jury when folks are maimed or killed.

TIAX
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by TIAX » Mon Jul 02, 2018 10:03 pm

1CEBITN wrote:
Mon Jul 02, 2018 1:53 pm
TIAX wrote:
Thu Jun 28, 2018 5:38 pm
1CEBITN wrote:
Thu Jun 28, 2018 12:50 pm
\Also remember one of the biggest, most ridiculous things in our legal system is it is "free" to sue someone. Plaintiff's lawyers don't get paid unless you win typically so anybody can sue you any time over any thing and some sleazy lawyer will take that case just to see if you will settle vs pay your lawyer to defend you (tens of thousands of dollars for a typical civil suit).
That's a pretty simplistic view. Lawyers generally don't take loser cases and, if they do, they'll dismiss them pretty quickly once they see the defendant isn't willing to settle for nuisance value. And to the extent a case is frivolous, a defendant can usually get attorneys' fees from plaintiff.
I think that's a pretty optimistic view based on my experiences. Have you ever been sued frivolously? Have you ever tried to get attorney's fees from the plaintiff in such an instance? Do you know how much that costs?
No, no, and yes. And since you would get all your attorneys' fees (including fees related to the attorneys' fees application), you shouldn't care very much. Of course, this assumes the case is in fact frivolous. People like to throw that word around without knowing what it really means.
1CEBITN wrote:
Mon Jul 02, 2018 1:53 pm
If you look like you have money you are more likely to get sued by someone who has no money and no conscience just for being in the wrong place at the wrong time because it costs them nothing to find a lawyer who will take their case. Someone can punch you in the face just standing there doing nothing and then sue you for starting a fight. They can break into your house and sue you for hitting them with a bat to protect your family. Lawyers take those cases all day long because they get to deal with insurance companies in those cases and personal injury law really doesn't have much to do with facts like a criminal court does, it is totally perception, and a jury normally decides the award which puts the outcome totally up in the air based on the jury's personal experiences. Do you want to guess how often the rich guy wins in a jury trial?
I'm not sure why you trust a jury sitting in a criminal case more so than a civil case. Jurors draw from their experiences in both contexts. As for how often rich guys win, that depends in part on the jury pool.
1CEBITN wrote:
Mon Jul 02, 2018 1:53 pm
OJ was acquitted and still had to pay for wrongful death as another example. No comment on OJ's guilt/innocence but just a data point that criminal law and injury law are not related in all cases. Logic doesn't always apply in a personal injury case.
Those results aren't inconsistent. As you probably know, the burden of proof in a criminal case is much higher than in a civil case.
1CEBITN wrote:
Mon Jul 02, 2018 1:53 pm
My point is, get the umbrella, it is cheap and buy more than you think you need because there are a lot of ways you can get sued in this country.
Agreed.

JBTX
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by JBTX » Mon Jul 02, 2018 10:06 pm

elnegativo wrote:
Mon Jul 02, 2018 9:54 pm
1CEBITN wrote:
Mon Jul 02, 2018 1:53 pm
TIAX wrote:
Thu Jun 28, 2018 5:38 pm
1CEBITN wrote:
Thu Jun 28, 2018 12:50 pm
\Also remember one of the biggest, most ridiculous things in our legal system is it is "free" to sue someone. Plaintiff's lawyers don't get paid unless you win typically so anybody can sue you any time over any thing and some sleazy lawyer will take that case just to see if you will settle vs pay your lawyer to defend you (tens of thousands of dollars for a typical civil suit).
That's a pretty simplistic view. Lawyers generally don't take loser cases and, if they do, they'll dismiss them pretty quickly once they see the defendant isn't willing to settle for nuisance value. And to the extent a case is frivolous, a defendant can usually get attorneys' fees from plaintiff.
I think that's a pretty optimistic view based on my experiences. Have you ever been sued frivolously? Have you ever tried to get attorney's fees from the plaintiff in such an instance? Do you know how much that costs? If you look like you have money you are more likely to get sued by someone who has no money and no conscience just for being in the wrong place at the wrong time because it costs them nothing to find a lawyer who will take their case. Someone can punch you in the face just standing there doing nothing and then sue you for starting a fight. They can break into your house and sue you for hitting them with a bat to protect your family. Lawyers take those cases all day long because they get to deal with insurance companies in those cases and personal injury law really doesn't have much to do with facts like a criminal court does, it is totally perception, and a jury normally decides the award which puts the outcome totally up in the air based on the jury's personal experiences. Do you want to guess how often the rich guy wins in a jury trial?

I have seen similar things happen to friends with money on a few occasions and, without their insurance company's lawyers getting involved, they would have been out a 5-figure sum just for the lawyer fees to go through discovery before it even got to trial, irregardless of the outcome of the case. That would be the point the plaintiff's lawyer would be able to tell he had a dud. I had a buddy driving his Mercedes E-class who cut a guy off in traffic inadvertently, just never saw him, the guy proceeds to pull a gun from his door pocket, holds it up so my buddy can see it. My buddy tries to get away from him by making a quick turn from his lane (legally). The guy chases him across a lane of traffic, hitting another car, and then sues my buddy because now he has "back problems." That's a pretty extreme example but the insurance company settled rather than taking their chances in court even though that guy is obviously a whack job (his lawyer is too). OJ was acquitted and still had to pay for wrongful death as another example. No comment on OJ's guilt/innocence but just a data point that criminal law and injury law are not related in all cases. Logic doesn't always apply in a personal injury case.

My point is, get the umbrella, it is cheap and buy more than you think you need because there are a lot of ways you can get sued in this country.
While there is no screening process for civil suits before they are filed, after they are filed, every state has systems in place for defining "frivolous suits" and methods for quickly getting them dismissed. In Texas, for example, the definition is "no basis in fact or law." If you file such a suit, the defendant can immediately move to have it dismissed and will get it dismissed if it has no basis in fact or law. So, by definition, no one ever wins a frivolous case.

As far as insurance claims go, why would they regularly settle claims that have no basis in fact or law when they know if they just tell you "no" and force you file suit that you will be dismissed? As far as claims adjusting goes, is there occasionally going to be an outlier? Sure. Does it work perfectly every time? Probably not. But there is no epidemic of frivolous lawsuits or frivolous claims being paid.

Civil juries aren't crazy or illogical. They are just like you and me. In fact, they ARE you and me. When they return a verdict - big or small or nothing - it's because they have good reasons based on the evidence they heard in court. This idea that our civil justice system is suffering from existential flaws is propaganda put together by insurance companies and the national chamber because, well, they don't like being on the business end of a fair jury when folks are maimed or killed.
As annoying, seemingly arbitrary and unfair as civil suits can be on occasion, the Civil tort system at times is the only thing driving behavior modifications for all of our benefits. There is only so far laws and regulations can go. We probably live much safer lives due to the Civil tort system.

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Lieutenant.Columbo
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Lieutenant.Columbo » Sun Sep 09, 2018 12:33 am

golfCaddy wrote:
Wed Jun 27, 2018 7:07 pm
80-90% of personal umbrella claims are for auto accidents. If you almost never drive, don't own any dangerous pets, don't have any high risk hobbies, like boating or flying a private plane, and rent an apartment or condo, I question whether you need an umbrella policy at all.
if one rents an apartment or condo, do you question or do you Not question the need of umbrella insurance? And, why? Thank you
Note: We own and live in a condo.
Lt. Columbo: Well, what do you know. Here I am talking with some of the smartest people in the world, and I didn't even notice!

Skierajs
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Skierajs » Sun Sep 09, 2018 1:12 am

I’m not sure how much you’re paying for the umbrella without auto, but I’m in a similar boat with no car (but do rent occasionally) and when I priced it out it was cheaper to buy a “named non-owner” auto policy PLUS an umbrella from Geico than a stand-alone umbrella from anywhere else. It’s also nice knowing I have full coverage when renting a car while traveling.

golfCaddy
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by golfCaddy » Sun Sep 09, 2018 9:40 am

Lieutenant.Columbo wrote:
Sun Sep 09, 2018 12:33 am
golfCaddy wrote:
Wed Jun 27, 2018 7:07 pm
80-90% of personal umbrella claims are for auto accidents. If you almost never drive, don't own any dangerous pets, don't have any high risk hobbies, like boating or flying a private plane, and rent an apartment or condo, I question whether you need an umbrella policy at all.
if one rents an apartment or condo, do you question or do you Not question the need of umbrella insurance? And, why? Thank you
Note: We own and live in a condo.
Like, I said, 80-90% of umbrella lawsuits are about auto accidents. So the first question is do own a car or a boat or an airplane? Assuming the answer is no, the question is what other liability exposures do you have? If you own your own home, and someone slips and falls on the sidewalk, they can sue you. If you rent, they sue the apartment owner. If someone drowns in the pool you own, they sue you. If someone drowns in a community pool and you rent, they sue the apartment owner. If you own your home and a construction worker falls off the roof, they can sue you. If you rent, they sue the apartment complex. If you own a condo, you should talk to a lawyer, but I assume the condo association has umbrella insurance that covers the communal areas.

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Lieutenant.Columbo
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Lieutenant.Columbo » Sun Sep 09, 2018 10:28 am

golfCaddy wrote:
Sun Sep 09, 2018 9:40 am
Lieutenant.Columbo wrote:
Sun Sep 09, 2018 12:33 am
golfCaddy wrote:
Wed Jun 27, 2018 7:07 pm
80-90% of personal umbrella claims are for auto accidents. If you almost never drive, don't own any dangerous pets, don't have any high risk hobbies, like boating or flying a private plane, and rent an apartment or condo, I question whether you need an umbrella policy at all.
if one rents an apartment or condo, do you question or do you Not question the need of umbrella insurance? And, why? Thank you
Note: We own and live in a condo.
Like, I said, 80-90% of umbrella lawsuits are about auto accidents. So the first question is do own a car or a boat or an airplane? Assuming the answer is no, the question is what other liability exposures do you have? If you own your own home, and someone slips and falls on the sidewalk, they can sue you. If you rent, they sue the apartment owner. If someone drowns in the pool you own, they sue you. If someone drowns in a community pool and you rent, they sue the apartment owner. If you own your home and a construction worker falls off the roof, they can sue you. If you rent, they sue the apartment complex. If you own a condo, you should talk to a lawyer, but I assume the condo association has umbrella insurance that covers the communal areas.
I see, thank you.
It baffles me that the owner of a house or that a condo association would be found at fault (or whatever the legal term is) when someone drowns in their pool or slips when when on the premises, if the accident happens with no (direct?) fault of the owner's or the association's. How can the legal system find fair finding the owner at fault when the accident did not happen due to negligence or fault of the owner? :?
Do you know?
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Watty
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Watty » Sun Sep 09, 2018 10:38 am

I might have missed it but I don't think one thing was mentioned. That is to get a quote and then decide. If getting a couple million dollars in extra coverage only costs $50 a year more then there would be little reason to not get it even if there was not a clear need for it.

Saving$
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Saving$ » Sun Sep 09, 2018 11:08 am

I'm not really sure the insurers are as expert at selecting lawyers as Afan's friend thinks. A few years ago, an acquaintance was named in a suit, and notified his insurance. They assigned an attorney who seemed to want to cut a deal, which would have cost well into the low 6 figures. He was furious, as he believed he had nothing whatsoever to do with the incident other than attending the event the incident took place. He ended up hiring his own lawyer, who got a hearing in front of the judge, and got the judge to agree the plaintiff needed to remove my acquaintance from the suit. The insurance company lawyer marveled at that strategy...The total cost of legal fees was mid five figures, far less than what the insurance company was willing to pay, and my acquaintance then had to fight his insurance to get his legal fees reimbursed for saving the insurance six figures...

sambb
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by sambb » Sun Sep 09, 2018 11:10 am

For the OP, i would definitely buy 5M, and i would definitely buy a car with autobraking, lane change, blind spot etc - most of the brands have this now. I would not be driving an older car with out these.
Also get a doorbell security cam and other cameras. Cant hurt

golfCaddy
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by golfCaddy » Sun Sep 09, 2018 11:13 am

Lieutenant.Columbo wrote:
Sun Sep 09, 2018 10:28 am
I see, thank you.
It baffles me that the owner of a house or that a condo association would be found at fault (or whatever the legal term is) when someone drowns in their pool or slips when when on the premises, if the accident happens with no (direct?) fault of the owner's or the association's. How can the legal system find fair finding the owner at fault when the accident did not happen due to negligence or fault of the owner? :?
Do you know?
I'm not a lawyer, but I would venture the legal system has a much more expansive definition of fault and negligence than you do. See the Demi Moore lawsuit as an example:

Moore has now been added as a defendant in the case, according to court documents obtained by PEOPLE. The Valle family is blaming the actress for allegedly failing to place depth markers near what they claim was an “excessively deep” pool. They also allege that rocks by the pool’s edge were a tripping hazard, and that alcohol and the pool’s “dangerously high” temperature (allegedly 101 degrees at the time) were factors in his death.

boglerdude
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by boglerdude » Mon Sep 10, 2018 1:15 am

> How can the legal system find the owner at fault when the accident did not happen due to negligence or fault of the owner?

You're right. Folks who sell insurance downplay the fact that foreseeable negligence is required for liability.

But rather than go to trial and have the jury hear "someone at that complex should have predicted the hazard!", cases always settle. So, have your 1M umbrella and 50k (the max) of HOA loss assessment coverage.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Call_Me_Op » Mon Sep 10, 2018 6:06 am

golfCaddy wrote:
Wed Jun 27, 2018 7:07 pm
I question whether you need an umbrella policy at all.
I don't. Even if he drives 10 feet per day, there is risk.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

badger42
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by badger42 » Mon Sep 10, 2018 1:44 pm

Looking at net worth and risk, the #1 thing I would consider doing is to stop driving. For that 10 times a year, take an Uber/Lyft (even one of the nice ones) and be done with it.

ohyeah
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by ohyeah » Wed Sep 12, 2018 3:21 pm

I was under the impression that most states(mine does) have laws that protect retirement accts and erisa pensions, along with homes and vehicles.

Unless you have substantial tax paid accts and/or luxury toys, why should you be concerned about umbrella policies? Is this a case of being over-insured? If you have $5+ mil in IRA's, are you still vulnerable even with state protection?

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Pigeye Brewster » Wed Sep 12, 2018 3:47 pm

ohyeah wrote:
Wed Sep 12, 2018 3:21 pm
I was under the impression that most states(mine does) have laws that protect retirement accts and erisa pensions, along with homes and vehicles.

Unless you have substantial tax paid accts and/or luxury toys, why should you be concerned about umbrella policies? Is this a case of being over-insured? If you have $5+ mil in IRA's, are you still vulnerable even with state protection?
I'm not a lawyer. But my understanding is that while ERISA and certain other retirement accounts may be protected from bankruptcy or other creditor claims, distributions from those accounts might be subject to any outstanding judgments.

Iridium
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Iridium » Wed Sep 12, 2018 4:46 pm

Pigeye Brewster wrote:
Wed Sep 12, 2018 3:47 pm
ohyeah wrote:
Wed Sep 12, 2018 3:21 pm
I was under the impression that most states(mine does) have laws that protect retirement accts and erisa pensions, along with homes and vehicles.

Unless you have substantial tax paid accts and/or luxury toys, why should you be concerned about umbrella policies? Is this a case of being over-insured? If you have $5+ mil in IRA's, are you still vulnerable even with state protection?
I'm not a lawyer. But my understanding is that while ERISA and certain other retirement accounts may be protected from bankruptcy or other creditor claims, distributions from those accounts might be subject to any outstanding judgments.
Someone in that position would almost certainly file for bankruptcy. This would prevent creditors from going after distributions (and any other asset) until bankruptcy proceedings are finished). Assuming the judgement was not related to drunk driving or other criminal activity, non secured debts get wiped away in the bankruptcy process, so your distributions would be protected after bankruptcy as well.

ohyeah
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by ohyeah » Wed Sep 12, 2018 9:54 pm

Someone in that position would almost certainly file for bankruptcy. This would prevent creditors from going after distributions (and any other asset) until bankruptcy proceedings are finished). Assuming the judgement was not related to drunk driving or other criminal activity, non secured debts get wiped away in the bankruptcy process, so your distributions would be protected after bankruptcy as well.
Sounds plausible.

Since tax paid accts would be unprotected, seems like this could be another item to consider when doing Roth conversions. Conventional wisdom would have you paying the taxes with your tax paid acct., thus reducing overall exposure to liability claims. Assuming of course, your state offers protection for tax deferred accts.

Mordoch
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Mordoch » Wed Sep 12, 2018 10:04 pm

ohyeah wrote:
Wed Sep 12, 2018 9:54 pm
Since tax paid accts would be unprotected, seems like this could be another item to consider when doing Roth conversions. Conventional wisdom would have you paying the taxes with your tax paid acct., thus reducing overall exposure to liability claims. Assuming of course, your state offers protection for tax deferred accts.
In case there is any confusion on this point Roth accounts are definitely also comparably protected. The only thing to be aware of with regards to Roth IRAs (with also applies to a regular IRA) is their protection in bankruptcy only goes up to slightly over $1,283,000 dollars currently in case that detail is relevant for you.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Peppergrass » Thu Sep 13, 2018 12:18 am

amp wrote:
Thu Jun 28, 2018 3:12 pm
Pete3 wrote:
Thu Jun 28, 2018 1:45 pm
As been stated by others, your net worth has nothing to do with how much umbrella insurance you need and discussing it in those terms means you don't understand what umbrella coverage is.
I'm not sure I agree with this. Seems to me that the more assets one has, the higher the umbrella coverage should be. Shouldn't a person with $2 million in assets have more coverage than one with $20,000, even if both have the same liability risk? The millionaire simply has more to protect.

There's no amount of liability coverage that can protect you from every risk, but I think using your net worth as a guideline is a perfectly valid rule of thumb.
I think what he means in a different way is.. you can't protect your assets fully because if it goes over you are done.. but I believe you are correct if you have more to lose, you should up the limit if you worry at night of losing a large amount of your money to a lawsuit... cheap price to pay in my eyes..

you have umbrella for 5 mill. you crush top violinists hand and he sues for 13 million and wins because you had alcohol on the breath detector even under limit.. what this does is

A. pays up to 5 mill.. you cover 8 out of pocket so you just lost all your assets in life
B. you can't be sure what they can sue for and win, I saw a case in Hawaii and said they won 15 mill... so yeah it happens
C. umbrella doesn't cover your assets, which I think you mistake, it covers up to the amount you specified and paid for if you got sued
D. I believe we are trying to define risk here, and 5 isn't a top end of the spectrum in my eyes, when I saw that in Hawaii I said man someone got hit hard, if they had 15 mill protection they were fine, anything under, nope..


shouldn't we be talking about a trust and asset protection also??/ isn't this what the main user is really wanting?

I would just up the limits, or try to find another company who will do a better pricing.. insurance is a pain but you have to pay it because if you don't, that's when you are going to get in trouble... I once was involved in a lawsuit and glad I had my insurance!!!
Last edited by Peppergrass on Thu Sep 13, 2018 12:22 am, edited 1 time in total.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by OnTrack » Thu Sep 13, 2018 12:19 am

Mordoch wrote:
Wed Sep 12, 2018 10:04 pm
ohyeah wrote:
Wed Sep 12, 2018 9:54 pm
Since tax paid accts would be unprotected, seems like this could be another item to consider when doing Roth conversions. Conventional wisdom would have you paying the taxes with your tax paid acct., thus reducing overall exposure to liability claims. Assuming of course, your state offers protection for tax deferred accts.
In case there is any confusion on this point Roth accounts are definitely also comparably protected. The only thing to be aware of with regards to Roth IRAs (with also applies to a regular IRA) is their protection in bankruptcy only goes up to slightly over $1,283,000 dollars currently in case that detail is relevant for you.
See: https://www.irahelp.com/slottreport/you ... -surprised
Based on this article, the $1,283,000 is bankruptcy protection only. It does not cover "general creditors" which apparently would include judgements from lawsuits. Also, inherited IRAs are not covered under federal law.

As far as state law protection, I think that even if the state where you live offers protection for IRAs, I do not think that is sufficient to be entirely safe. For example, what if while driving in another state a person is involved in an accident. I think in that case, the laws of the state where the accident occurred would apply. Disclaimer: IANAL.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Sasquatch » Thu Sep 13, 2018 12:24 am

My arguement is very rudimentary but why not spend as an example $1000 a year to help protect $7M? At the very least just to have the piece of mind that you will get some measure of protection (even if small) in the event of a incident. Insurance + making good life choices = a good nights sleep

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by TheClash » Tue Sep 18, 2018 11:27 am

megabad wrote:
Fri Jun 29, 2018 2:27 pm
Would strongly recommend non-owned auto insurance as I see that as your biggest exposure. For me, umbrella would depend on where you live and what you drive. If you lived in/rented in a billion dollar downtown condo/apt building, I would be inclined to carry a very large umbrella policy as renter's insurance typically offers pathetic liability coverage. If you lived in/rented a mansion, I would have a modest amount (low millions).

When you rent cars, I would rent the modest compact or intermediate sized car to limit my exposure on auto. If you rent a luxury brand, then I would up your coverage extensively. In states with discovery (most states), the ambulance chaser can always find out your assets and coverages, but they will be less inclined to even take on a case if you are driving around in the Toyota Yaris and you pull up to your 1970s split level rental house on the poor side of town. If this doesn't describe you, I would prepare accordingly.
OP here.
Thank you megabad for the non-owned auto insurance suggestion! Just got it. Not cheap, but added peace of mind. Now, I need to decide if I still max out the coverage that I get from the rental car companies, or just go with the basic. Thank you all for your input!

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Leesbro63 » Wed Sep 19, 2018 8:55 am

TheClash wrote:
Tue Sep 18, 2018 11:27 am
megabad wrote:
Fri Jun 29, 2018 2:27 pm
Would strongly recommend non-owned auto insurance as I see that as your biggest exposure. For me, umbrella would depend on where you live and what you drive. If you lived in/rented in a billion dollar downtown condo/apt building, I would be inclined to carry a very large umbrella policy as renter's insurance typically offers pathetic liability coverage. If you lived in/rented a mansion, I would have a modest amount (low millions).

When you rent cars, I would rent the modest compact or intermediate sized car to limit my exposure on auto. If you rent a luxury brand, then I would up your coverage extensively. In states with discovery (most states), the ambulance chaser can always find out your assets and coverages, but they will be less inclined to even take on a case if you are driving around in the Toyota Yaris and you pull up to your 1970s split level rental house on the poor side of town. If this doesn't describe you, I would prepare accordingly.
OP here.
Thank you megabad for the non-owned auto insurance suggestion! Just got it. Not cheap, but added peace of mind. Now, I need to decide if I still max out the coverage that I get from the rental car companies, or just go with the basic. Thank you all for your input!
Not sure if this gives you enough coverage, but a family member living in NYC has non-owned auto insurance (doesn't own a car living in NYC). When he rents cars, he uses the Chase Sapphire Preferred card ($95/yr), with primary coverage, and buys no other insurance. The main risk is liability which is covered by the non-owner's policy.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by cdu7 » Wed Sep 19, 2018 9:16 am

There is a much greater risk of being over insured than under insured in this situation. If you trust yourself enough to know that you will never be a negligent and or criminally liable driver, then a couple million umbrella is going to cover you in 99.9% of situations. You aren't going to be in an accident with a world famous hand model or whatever crazy scenarios they are running here. The worst case scenario is that you will be in an accident with an overly litigious driver who manages to squeeze a couple thousand extra out of your insurance payout because they are claiming fake injuries. I doubt you will ever even enter umbrella territory in the vast majority of traffic accidents, which typically occur at low speed.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by snackdog » Thu Jan 03, 2019 5:07 pm

cdu7 wrote:
Wed Sep 19, 2018 9:16 am
There is a much greater risk of being over insured than under insured in this situation.
The risk of being over-insured is you lose $500/yr for 30 years. The risk of being under-insured is you lose everything except protected assets (depends on state, e.g. house, 401K).

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by GmanJeff » Thu Jan 03, 2019 5:45 pm

With USAA, they provide the first $5M of my coverage; the rest is through them but by a different insurer.

FWIW, in the OP's situation, $10M is not a bad idea and may not actually cost too much more than the $5M level. While the probability of a loss reaching that level is small, that actuarial probability should be more or less correspondingly proportional to the premiums. My $10M policy does not cost twice as much as the $5M policy.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Dale_G » Thu Jan 03, 2019 7:04 pm

My 1 million umbrella policy is a small fraction of assets at risk. I have the impression that a suit for a million dollars or so gets the attention of my insurance companies and they will put on a proper defense. I only have the umbrella so I don't have to mess around with lawyers. Not that lawyers are all bad, but I would rather be doing other things.

I understand that the cost per million declines as the insured amount goes up, but enough is probably enough.

Dale
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by needadvise1 » Sat Jan 05, 2019 12:14 am

TheClash wrote:
Tue Sep 18, 2018 11:27 am
megabad wrote:
Fri Jun 29, 2018 2:27 pm
Would strongly recommend non-owned auto insurance as I see that as your biggest exposure. For me, umbrella would depend on where you live and what you drive. If you lived in/rented in a billion dollar downtown condo/apt building, I would be inclined to carry a very large umbrella policy as renter's insurance typically offers pathetic liability coverage. If you lived in/rented a mansion, I would have a modest amount (low millions).

When you rent cars, I would rent the modest compact or intermediate sized car to limit my exposure on auto. If you rent a luxury brand, then I would up your coverage extensively. In states with discovery (most states), the ambulance chaser can always find out your assets and coverages, but they will be less inclined to even take on a case if you are driving around in the Toyota Yaris and you pull up to your 1970s split level rental house on the poor side of town. If this doesn't describe you, I would prepare accordingly.
OP here.
Thank you megabad for the non-owned auto insurance suggestion! Just got it. Not cheap, but added peace of mind. Now, I need to decide if I still max out the coverage that I get from the rental car companies, or just go with the basic. Thank you all for your input!
Non-owned car insurance is cheap and fine. You need to cover liability, but depending on the terms of your umbrella it may cover liability from $0 if you don't have any primary coverage. Others will only cover in excess of a certain amount (sometimes state minimum limits, sometimes a defined higher number), which could be met by the rental car counter LIABILITY insurance or your non-owned policy. The free credit card stuff is fine for protecting the car, but not your liability.

On the other hand, almost all umbrella will not cover owned autos to $0 liability.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by AlphaLess » Sat Jan 05, 2019 1:12 am

dual wrote:
Wed Jun 27, 2018 7:03 pm
I do not understand making a connection between your net worth and the umbrella policy amount.

AFAIK juries are not told the amount of your insurance or your net worth so the award should not be related. Once a jury awards above say $1 million then the sky is the limit and the amount actually awarded will depend on an appeal to a higher court.

What you are buying is the insurance company's A-team lawyers. If you cannot get the company's attention with say a $1 million policy why do you think you will get more attention for $5 or $7 million?
I agree. An umbrella insurance is for the most part pre-paid legal.

There is absolutely no connection between net worth and umbrella insurance amount.

Do you think Warren Buffet has umbrella insurance for $80B?
Do you think Jeff Bezos has umbrella insurance for $100B?

Liability insurance == insurance against low-quality ambulance chasers.
Umbrella insurance == insurance against higher level scam artists.
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by AlphaLess » Sat Jan 05, 2019 1:15 am

Dale_G wrote:
Thu Jan 03, 2019 7:04 pm
My 1 million umbrella policy is a small fraction of assets at risk. I have the impression that a suit for a million dollars or so gets the attention of my insurance companies and they will put on a proper defense. I only have the umbrella so I don't have to mess around with lawyers. Not that lawyers are all bad, but I would rather be doing other things.

I understand that the cost per million declines as the insured amount goes up, but enough is probably enough.

Dale
Not true about cost per million declining.

1st: $120
2nd: $100
3rd: $90
4th: $80
5-10: $1K

I think insurance companies start thinking that you are a litigation magnet when you start asking for larger dollar figures.
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by AlphaLess » Sat Jan 05, 2019 1:18 am

Skierajs wrote:
Sun Sep 09, 2018 1:12 am
I’m not sure how much you’re paying for the umbrella without auto, but I’m in a similar boat with no car (but do rent occasionally) and when I priced it out it was cheaper to buy a “named non-owner” auto policy PLUS an umbrella from Geico than a stand-alone umbrella from anywhere else. It’s also nice knowing I have full coverage when renting a car while traveling.
Golden.
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by AlphaLess » Sat Jan 05, 2019 1:19 am

GmanJeff wrote:
Thu Jan 03, 2019 5:45 pm
With USAA, they provide the first $5M of my coverage; the rest is through them but by a different insurer.

FWIW, in the OP's situation, $10M is not a bad idea and may not actually cost too much more than the $5M level. While the probability of a loss reaching that level is small, that actuarial probability should be more or less correspondingly proportional to the premiums. My $10M policy does not cost twice as much as the $5M policy.
That's interesting.

I would like to know the name of the second insurer.
"You can get more with a kind word and a gun than with just a kind word." George Washington

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by GmanJeff » Sat Jan 05, 2019 7:47 am

AlphaLess wrote:
Sat Jan 05, 2019 1:19 am
GmanJeff wrote:
Thu Jan 03, 2019 5:45 pm
With USAA, they provide the first $5M of my coverage; the rest is through them but by a different insurer.

FWIW, in the OP's situation, $10M is not a bad idea and may not actually cost too much more than the $5M level. While the probability of a loss reaching that level is small, that actuarial probability should be more or less correspondingly proportional to the premiums. My $10M policy does not cost twice as much as the $5M policy.
That's interesting.

I would like to know the name of the second insurer.
Hudson Insurance Group

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by GmanJeff » Sat Jan 05, 2019 7:57 am

Lieutenant.Columbo wrote:
Sun Sep 09, 2018 12:33 am
golfCaddy wrote:
Wed Jun 27, 2018 7:07 pm
80-90% of personal umbrella claims are for auto accidents. If you almost never drive, don't own any dangerous pets, don't have any high risk hobbies, like boating or flying a private plane, and rent an apartment or condo, I question whether you need an umbrella policy at all.
if one rents an apartment or condo, do you question or do you Not question the need of umbrella insurance? And, why? Thank you
Note: We own and live in a condo.
Consider this scenario - you live in a condo and have a accidental small and brief kitchen fire. The sprinkler system puts out the fire, but the ensuing water damage extends to a large number of other condo units in the building, damaging their interiors and contents. The insurers for the condo itself and for each separate condo unit look to you for the damages they pay to those they insured. If the condos were expensive to restore, and the units' contents costly to repair or replace, you may rapidly be liable for several million dollars, likely exceeding your homeowner's coverage and implicating your umbrella policy and its limits. I am aware of one such situation which actually occurred, and the umbrella policy prevented financial loss on the part of the condo owner who had the fire.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by FoolMeOnce » Sat Jan 05, 2019 9:10 am

AlphaLess wrote:
Sat Jan 05, 2019 1:12 am
dual wrote:
Wed Jun 27, 2018 7:03 pm
Liability insurance == insurance against low-quality ambulance chasers.
Umbrella insurance == insurance against higher level scam artists.
So if you get hit by a car while walking in a cross walk, which would you be?

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by cantos » Sat Jan 05, 2019 11:13 am

The misinformation on this thread is legion. I have done plaintiff, defence, and in house work for insurance cos. The amount of insurance limits you buy almost certainly has no bearing with what kind of lawyer you are "buying" to defend a case

All i will say for now is the OP's umbrella insurance amount is about risks vs costs. Umbrella insurance of $5-10 mil for a $7 mil net worth is relatively cheap. Ask around. Find ways to protect the estate (corps etc). Insurance protects some things under some circs, not all. Lawsuits against individials for over $1 mil are rare. Over $5 mil, rarer still. All depends on what the OP is doing in life. Read the policy and understand what you are buying. If you don't understand, hire a good broker or lawyer to translate the policy for you.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by LadyGeek » Sat Jan 05, 2019 11:20 am

This thread is now in the Personal Finance (Not Investing) forum (insurance).
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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by DrGoogle2017 » Sat Jan 05, 2019 11:29 am

I think $5 million is sufficient. Regarding automobile accident, I know two cases, my sister’s friend who was sued for $5million, but the lawsuit settled at $500k. No death involved. In another case, claimed falsely on purpose, no death involved, only $25k. My kid now has a dash cam, driving in LA is dangerous because lots of false claims.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by KJVanguard » Sat Jan 05, 2019 3:08 pm

For a long time I had a $2M umbrella policy. After a crash last summer where I was at fault I got to thinking that I should raise it to $3M to fully cover my net worth. I sleep better knowing that AllState is on the hook for up to $3M and thus has major incentive to provide me with the best lawyers or to settle for up to $3M.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by remomnyc » Sat Jan 05, 2019 3:32 pm

OP, if you don't have a non-owner car policy, make sure you buy liability insurance whenever you rent. I don't own a car either, and my umbrella is void if I do not purchase liability insurance when I rent since I don't have auto insurance. My Chase Sapphire only covers collision and car damage. When I priced out a non-owner policy versus buying liability insurance when I rent, the non-owner would have made sense if I rented more than 20 days a year.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by Jack56 » Sat Jan 05, 2019 5:45 pm

The cost of 2m in additional insurance is probably negligible so i would buy it -- which also indicates the likelihood of an award in that amount.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by deanmoriarty » Sat Jan 05, 2019 6:46 pm

Has anyone done any actual reading of different umbrella policies and determined who the best provider is? I’m certain this type of insurance is not just a commodity product that can be chosen purely on price...

I recently joined the 7 figures net worth club so would like to do an umbrella policy for a couple millions, and my current auto insurer is GEICO and they provide one. I am a renter and besides driving regularly I am really not at risk, but still.

However, when I try to read the policy, all that legalese is just too difficult for me to understand, and I’m thinking how many gotchas it contains, and the fact that it might not be useful the day I’ll need it: in other words, how do I make sure it’s not just a placebo?

Recently I was listening to a podcast where a person insured their house against fire and the house burned down in one of the recent California fires: however, the insurance refused to pay for some gotchas that went like “you had too many trees planted in your backyard, and that’s against the policy since it increases your risk, so we’ll not pay, even if the house would have burned down anyway without any trees considering the massive fire”. This condition was buried in a contract hundreds of pages long, written in legalese :(

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by boglerdude » Sun Jan 06, 2019 12:05 am

^ As far as "gotchas" the top rated insurers (anecdotally based on reviews here) are Amica, USAA, and Chubb. Chubb has its own team of fire fighters.
GmanJeff wrote:
Sat Jan 05, 2019 7:57 am
If the condos were expensive to restore, and the units' contents costly to repair or replace, you may rapidly be liable for several million dollars, likely exceeding your homeowner's coverage and implicating your umbrella policy and its limits. I am aware of one such situation which actually occurred, and the umbrella policy prevented financial loss on the part of the condo owner who had the fire.
How much was the damage, the insurance limit, and the settlement amount. Structural damage inside the walls might be paid by the HOA master policy. HOA can bill the owner for the deductible. I suppose the HOA insurer could sue the owner, but I havent seen examples where they pursue that and reject a settlement offer (of the policy limit, however low it may be)
Last edited by boglerdude on Sun Jan 06, 2019 12:18 am, edited 1 time in total.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by pdavi21 » Sun Jan 06, 2019 12:10 am

In what scenario are you going to get sued for over 5 million, go to court instead of settling, lose, pay a lawyer to appeal, lose the appeal, and still have the plaintiff awarded over 5 million?

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by boglerdude » Sun Jan 06, 2019 12:34 am

^ None, which is we why we havent been able to find examples. (Commercial and malpractice insurances are different.)

The closest thing is a bad faith case, where the defendant's insurance doesnt make the effort to settle. So to follow up on a post earlier, if you're involved in litigation with actual 6-figure damages, you'll want your own attorney too, to keep an eye on your umbrella lawyers.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by snackdog » Sun Jan 06, 2019 8:58 am

deanmoriarty wrote:
Sat Jan 05, 2019 6:46 pm
Has anyone done any actual reading of different umbrella policies and determined who the best provider is? I’m certain this type of insurance is not just a commodity product that can be chosen purely on price...
...
Most of the retail insurers actually rely on the same few umbrella insurers (RLI, USLI, etc) so I think you will find the contracts pretty standard. A comparison of coverage is found https://www.irmi.com/docs/default-sourc ... f?sfvrsn=4. Like all situations, you need to read the contract and understand before and after purchase. It is written in "legalese", like all contracts, so ask your insurer if you don't understand it.

Matching the coverage amount to your net worth is just a rule of thumb, no math implied. If you have a NW of $500,000 you can manage with your normal liability coverage as long as your insurer is aware of your jet ski, biting dog, house boat, etc. If you have $2MM NW, it makes sense to get some umbrella. How much is up to you but matching NW works ok and will fit your budget. Once you get much beyond $5MM or so I think you may be better off self-insuring and hiring your own good lawyers to assist the insurance company.

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Re: Umbrella Policy: Right amount for $7 mil net worth?

Post by AlphaLess » Sun Jan 06, 2019 7:36 pm

So if you get hit by a car while walking in a cross walk, which would you be?
It depends:
- did the driver cut a red light, or some obvious violation?
- did the accident result in me losing my ability to produce income?

In my opinion, these is the pecking order of faults:
- bikers are by far the LEAST law abiding species,
- drivers are next,
- walkers are BY far the most careful and law-abiding.

I have had literally cars and bikes cut me off, while I am crossing in green light in the middle of the street.

I try to avoid getting hit.
Last edited by AlphaLess on Sun Jan 06, 2019 11:40 pm, edited 2 times in total.
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