Don’t need a PUP? [personal umbrella policy]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
talzara
Posts: 1691
Joined: Thu Feb 12, 2009 7:40 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by talzara »

oldfort wrote: Sat May 29, 2021 5:57 pm
SlowMovingInvestor wrote: Sat May 29, 2021 5:37 pm How do insurance companies price umbrella policies above say $2M ? There can't be that many people buying larger policies and claims are even fewer, so they cant have any statistics to set pricing.
I can't imagine it's difficult until you get to the uber-layers. 85% of personal claims are for auto accidents and we have good statistics on auto accidents: how many people die each year and how many people are paralyzed each year. If you kill or paralyze someone, I would expect most claims to settle for the policy limits, whether you have a $1M, $2M, or $5M policy.
Most, but not all. There actually is some risk reduction at the higher limits. Most umbrella insurers charge 3.15 times as much for a $5 million policy as a $1 million policy. GEICO thinks the ISO numbers are wrong and charges 4 times as much.

Above $5 million, nobody knows what the actual risk is. Some companies keep reducing the premium, some companies charge a flat premium, and some companies increase the premium. The tenth million could cost half as much as the first million, or it could cost twice as much. GEICO charges twice as much. Warren Buffett didn't become a billionaire by underpricing tail risk.
Jeepergeo
Posts: 156
Joined: Sun Dec 20, 2020 2:33 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Jeepergeo »

willthrill81 wrote: Sat May 29, 2021 5:23 pm Call me cheap, short-sighted, or whatever, but we don't have an umbrella policy and aren't interested in one. We have reasonably high coverage limits on our home and auto policies, and 100% of our portfolio other than our HSA is protected by federal or state law. Only a portion of our home equity is exposed to potential lawsuits.
My understanding is that once the money leaves those accounts, the anti-alienation provisions and protections no longer protect those monies.
User avatar
HanSolo
Posts: 380
Joined: Thu Jul 19, 2012 3:18 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by HanSolo »

AnEngineer wrote: Sat May 29, 2021 9:31 am I was not representing any position of yours, so I don't see how I could misrepresent it. The illustration was meant to show that your approach is flawed in circumstances like this (buying insurance) because there are rare cases that are absolutely catastrophic. You're able to recognize that with homeowner's insurance (which is why I used it as an illustration), but refuse to accept the possibility with umbrella insurance.
I never refused anything. You must have misunderstood my inquiry. Here it is again (below). If you have no response to that, then there's no need to respond, as criticizing my question doesn't move the conversation forward.
HanSolo wrote: Fri May 28, 2021 11:42 pm I only asked what the benefits are of an umbrella for a person in my situation. If you don't have an answer to my question, that's fine, but telling me I'm wrong for asking my question is not helpful.
MikeG62
Posts: 3717
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Don’t need a PUP? [personal umbrella policy]

Post by MikeG62 »

willthrill81 wrote: Sat May 29, 2021 5:23 pm Call me cheap, short-sighted, or whatever, but we don't have an umbrella policy and aren't interested in one. We have reasonably high coverage limits on our home and auto policies, and 100% of our portfolio other than our HSA is protected by federal or state law. Only a portion of our home equity is exposed to potential lawsuits.
I don't know what reasonably high is in your case. Our underlying liability on our auto is $500K. I carry 10X that on my umbrella primarily because I have significant assets that would not be protected in the event of a judgement, but also (as I stated above) because if someone were severely injured because of my actions (due to my being found to be at fault or partially at fault) I'd want that person(s) to have a sufficient pot of funds to go after to pay their medical claims and ongoing care. In other words, it's not all about protecting my assets. SanAntionetta and TomatoTomahto said basically the same thing on the 1st page of this thread.
TomatoTomahto wrote: Wed May 19, 2021 8:36 am
SanAntionetta wrote: Wed May 19, 2021 8:01 am I personally have a PUP because I am a responsible person, and would feel bad if someone got really hurt and I did not have enough insurance to help.
Thank you for stating this. I bring it up often in these threads, but it’s tiring. I am always surprised that it has to be stated on BH, whose membership is “ethical to the max,” and happy to remind everyone of that.

I would feel miserable if my short-sightedness and stinginess had prevented financial compensation for whatever harm I’d caused. We have as much umbrella as the company will give us.
In terms of cost, I pay ~$800 to cover my wife and I for $5 million. The cost of the first million is the most with each of the successive million dollar layers above that being less expensive. For comparison, we pay ~$2,200 annually for our auto insurance coverage (two vehicles) and a very similar amount for our homeowners insurance coverage. Our umbrella represents ~15% of the total cost of those three policies combined. In my view, it is very inexpensive coverage.
Real Knowledge Comes Only From Experience
AnEngineer
Posts: 554
Joined: Sat Jun 27, 2020 4:05 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by AnEngineer »

HanSolo wrote: Sun May 30, 2021 1:45 am
AnEngineer wrote: Sat May 29, 2021 9:31 am I was not representing any position of yours, so I don't see how I could misrepresent it. The illustration was meant to show that your approach is flawed in circumstances like this (buying insurance) because there are rare cases that are absolutely catastrophic. You're able to recognize that with homeowner's insurance (which is why I used it as an illustration), but refuse to accept the possibility with umbrella insurance.
I never refused anything. You must have misunderstood my inquiry. Here it is again (below). If you have no response to that, then there's no need to respond, as criticizing my question doesn't move the conversation forward.
HanSolo wrote: Fri May 28, 2021 11:42 pm I only asked what the benefits are of an umbrella for a person in my situation. If you don't have an answer to my question, that's fine, but telling me I'm wrong for asking my question is not helpful.
Not true, I have been responding to what you said below.
HanSolo wrote: Wed May 19, 2021 5:50 pm Before I consider buying, I want to understand how it's been useful in actual cases (not just in theory) for people in my situation.
I have no knowledge of specific actual cases in your situation (no house, no vehicle). But theoretical cases are valid reasons to buy, e.g. libel suits.
User avatar
LadyGeek
Site Admin
Posts: 72833
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Don’t need a PUP? [personal umbrella policy]

Post by LadyGeek »

The discussion is getting contentious. Please remove emotion and state your concerns in a civil, factual manner.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
willthrill81
Posts: 25278
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Don’t need a PUP? [personal umbrella policy]

Post by willthrill81 »

Jeepergeo wrote: Sun May 30, 2021 1:00 am
willthrill81 wrote: Sat May 29, 2021 5:23 pm Call me cheap, short-sighted, or whatever, but we don't have an umbrella policy and aren't interested in one. We have reasonably high coverage limits on our home and auto policies, and 100% of our portfolio other than our HSA is protected by federal or state law. Only a portion of our home equity is exposed to potential lawsuits.
My understanding is that once the money leaves those accounts, the anti-alienation provisions and protections no longer protect those monies.
True. But neither a plaintiff nor a plaintiff's attorney is likely to want to wait potentially many years for me to voluntarily decide to start withdrawing those funds.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
User avatar
willthrill81
Posts: 25278
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Don’t need a PUP? [personal umbrella policy]

Post by willthrill81 »

MikeG62 wrote: Sun May 30, 2021 6:58 am
willthrill81 wrote: Sat May 29, 2021 5:23 pm Call me cheap, short-sighted, or whatever, but we don't have an umbrella policy and aren't interested in one. We have reasonably high coverage limits on our home and auto policies, and 100% of our portfolio other than our HSA is protected by federal or state law. Only a portion of our home equity is exposed to potential lawsuits.
I don't know what reasonably high is in your case. Our underlying liability on our auto is $500K.
Ours is the same.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
SlowMovingInvestor
Posts: 2807
Joined: Sun Sep 11, 2016 11:27 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by SlowMovingInvestor »

talzara wrote: Sat May 29, 2021 8:58 pm
oldfort wrote: Sat May 29, 2021 5:57 pm
SlowMovingInvestor wrote: Sat May 29, 2021 5:37 pm How do insurance companies price umbrella policies above say $2M ? There can't be that many people buying larger policies and claims are even fewer, so they cant have any statistics to set pricing.
I can't imagine it's difficult until you get to the uber-layers. 85% of personal claims are for auto accidents and we have good statistics on auto accidents: how many people die each year and how many people are paralyzed each year. If you kill or paralyze someone, I would expect most claims to settle for the policy limits, whether you have a $1M, $2M, or $5M policy.
Most, but not all. There actually is some risk reduction at the higher limits. Most umbrella insurers charge 3.15 times as much for a $5 million policy as a $1 million policy. GEICO thinks the ISO numbers are wrong and charges 4 times as much.

Above $5 million, nobody knows what the actual risk is. Some companies keep reducing the premium, some companies charge a flat premium, and some companies increase the premium. The tenth million could cost half as much as the first million, or it could cost twice as much. GEICO charges twice as much. Warren Buffett didn't become a billionaire by underpricing tail risk.
Thanks for the info. Another question to which you might know the answer --

Why do so many insurance companies want you to have home or auto with them before they'll sell you umbrella ? Indeed some companies such as Travelers wouldn't sell you umbrella even if you have home (but not auto) with them ? If Umbrella is profitable stand alone, why don't more of the larger companies sell it stand alone ?

Having auto/home with a company means they have more information on you, but presumably they can get that from you before quoting. It's harder to shop around for umbrella because only a few companies will offer it unbundled.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
User avatar
mrspock
Posts: 1643
Joined: Tue Feb 13, 2018 2:49 am
Location: Vulcan

Re: Don’t need a PUP? [personal umbrella policy]

Post by mrspock »

PUP like all insurance is about spreading risk (shared with other policy holders), and aligning your interests with that of somebody with far deeper pockets and resources to fight lawsuits — an insurance company.

For $500-600/yr this is a no brainer for me, especially in the US where the airwaves are plastered with injury commercials.
talzara
Posts: 1691
Joined: Thu Feb 12, 2009 7:40 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by talzara »

SlowMovingInvestor wrote: Sun May 30, 2021 11:49 am Why do so many insurance companies want you to have home or auto with them before they'll sell you umbrella ? Indeed some companies such as Travelers wouldn't sell you umbrella even if you have home (but not auto) with them ? If Umbrella is profitable stand alone, why don't more of the larger companies sell it stand alone ?
Standalone umbrella appears to have lower claim frequencies than supported umbrella. It may be because plaintiffs have a harder time finding out about a standalone umbrella.

That makes it impossible to sell standalone umbrella in the same company as supported umbrella. The regulators allow multipolicy discounts, but they don't allow multipolicy surcharges. An insurer would have to write standalone umbrella in a separate company that has different base rates. Most large insurers believe that the market is too small to justify a separate underwriting company, so they don't sell standalone at all.

Berkshire Hathaway is the only large insurer that does it. GEICO writes supported umbrella, and USLI writes standalone umbrella. Even if GEICO turns you down for supported umbrella, it won't refer you to USLI.
cbeck
Posts: 377
Joined: Sun Jun 24, 2012 1:28 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by cbeck »

HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
SAme here. I carried umbrella insurance until I decided to quit driving and surrendered my driver's license at age 59, a decision that took a great load off my mind. I had already sold my home. As you have realized we non-drivers don't have much opportunity to cause damage to other people. So, we don't need the insurance.
User avatar
HanSolo
Posts: 380
Joined: Thu Jul 19, 2012 3:18 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by HanSolo »

cbeck wrote: Sun May 30, 2021 7:14 pm
HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
SAme here. I carried umbrella insurance until I decided to quit driving and surrendered my driver's license at age 59, a decision that took a great load off my mind. I had already sold my home. As you have realized we non-drivers don't have much opportunity to cause damage to other people. So, we don't need the insurance.
OK. That's interesting to know. There seem to be multiple opinions here, as I had alluded:
HanSolo wrote: Fri May 28, 2021 11:53 pm The thread title is "Don't need a PUP?", and what I'm seeing is that there may be no objective answer to this question, in some cases... which is fine, I guess.
Regarding the following:
AnEngineer wrote: Sun May 30, 2021 8:14 am I have no knowledge of specific actual cases in your situation (no house, no vehicle). But theoretical cases are valid reasons to buy, e.g. libel suits.
OK. That is useful information. Just to clarify, asking about actual cases does not imply not being open to theoretical cases. If you check upthread, you'll see that I asked for both. (Not to debate... just clarifying what I'm after.)
Soon2BXProgrammer wrote: Sat May 29, 2021 7:34 am If your Mom carries a "renters policy" to cover her stuff in the retirement community, it should include some liability coverage. This coverage would exceed her 4-5 figures of money. so therefore she would have no meaningful exposed networth. hence no PUP required. (the list is incomplete, and renters policies should be added to the list)
OK. That's also interesting. However, in light of the comment (quoted above) about libel, and also the comment quoted below, are you sure the umbrella would be redundant in my mom's case?
hachiko wrote: Sun May 23, 2021 12:38 pm Homeowners and renters insurance policies rarely cover libel.
Soon2BXProgrammer
Posts: 2227
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

HanSolo wrote: Sun May 30, 2021 9:06 pm OK. That's also interesting. However, in light of the comment (quoted above) about libel, and also the comment quoted below, are you sure the umbrella would be redundant in my mom's case?
hachiko wrote: Sun May 23, 2021 12:38 pm Homeowners and renters insurance policies rarely cover libel.
For $15 a year, i was able to add the following rider to my home insurance policy. You need to ask if such rider exists for her renters policy. In fact, I was forced to add this to my underlying coverage before I was allowed to buy a PUP. I was told I could have this without the PUP as well.
Personal Injury Liability
Regarding damages for which the insured is legally liable, this provides coverage for intentional torts, such as:

Libel
Slander
Defamation of character
Wrongful entry or eviction
False arrest
Wrongful detention
Malicious prosecution
Assault and battery committed by an insured, or at their direction, to protect persons or property when the conduct is not criminal
Liability coverage for malicious prosecution does not apply in California.
It all comes down to risk. If she isn't a property owner and she doesn't drive, her risk is small. If she has a renters policy with reasonable liability coverage, then that is probably "enough".... but everyone has to decide how much is enough.
theplayer11
Posts: 1565
Joined: Tue Jul 22, 2014 8:55 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by theplayer11 »

michaeljc70 wrote: Wed May 19, 2021 8:44 am I think your neighbor is giving general advice that applies to most situations because most people have nothing in recoverable assets. Most people, if they have anything, have a residence and/or retirement accounts.

I had a friend that a few years ago was sued for more than his HO policy. A neighbor was walking on the sidewalk, approached my friend's dog (through a fence, never at risk of a bite), the dog barked and startled her and she fell and broke her arm (needing surgery). The dog was a French bulldog. He has a $300k policy and they sued for $500k (or something like that). It was a very stressful year for my friend. They eventually settled for the policy limit.
this is just so wrong..dog on other side of fence and lady falls and sues? Shame on her.
michaeljc70
Posts: 7742
Joined: Thu Oct 15, 2015 3:53 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by michaeljc70 »

theplayer11 wrote: Mon May 31, 2021 6:36 am
michaeljc70 wrote: Wed May 19, 2021 8:44 am I think your neighbor is giving general advice that applies to most situations because most people have nothing in recoverable assets. Most people, if they have anything, have a residence and/or retirement accounts.

I had a friend that a few years ago was sued for more than his HO policy. A neighbor was walking on the sidewalk, approached my friend's dog (through a fence, never at risk of a bite), the dog barked and startled her and she fell and broke her arm (needing surgery). The dog was a French bulldog. He has a $300k policy and they sued for $500k (or something like that). It was a very stressful year for my friend. They eventually settled for the policy limit.
this is just so wrong..dog on other side of fence and lady falls and sues? Shame on her.
Yes, it is terrible. But an old women that needed multiple surgeries on her arm often gets a juries sympathy even if it was her fault.
MikeG62
Posts: 3717
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Don’t need a PUP? [personal umbrella policy]

Post by MikeG62 »

cbeck wrote: Sun May 30, 2021 7:14 pm
HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
SAme here. I carried umbrella insurance until I decided to quit driving and surrendered my driver's license at age 59, a decision that took a great load off my mind. I had already sold my home. As you have realized we non-drivers don't have much opportunity to cause damage to other people. So, we don't need the insurance.
You still live somewhere and this opens you up to "some" albeit very small risk. Soon2BXProgreammer provided a list of risks unrelated to those which arise form driving a car or owning/renting a place to live. Need is in the eye of the beholder. Your risk is not zero (although I agree it is quite low).
Real Knowledge Comes Only From Experience
SlowMovingInvestor
Posts: 2807
Joined: Sun Sep 11, 2016 11:27 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by SlowMovingInvestor »

talzara wrote: Sun May 30, 2021 12:40 pm Berkshire Hathaway is the only large insurer that does it. GEICO writes supported umbrella, and USLI writes standalone umbrella. Even if GEICO turns you down for supported umbrella, it won't refer you to USLI.
So USLI might have lower rates than GEICO for umbrella ? My umbrella (and auto) is currently with GEICO.

How does one get a quote from USLI -- via agents/brokers, or direct ?
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
talzara
Posts: 1691
Joined: Thu Feb 12, 2009 7:40 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by talzara »

SlowMovingInvestor wrote: Tue Jun 08, 2021 7:22 am So USLI might have lower rates than GEICO for umbrella ? My umbrella (and auto) is currently with GEICO.

How does one get a quote from USLI -- via agents/brokers, or direct ?
USLI sells through independent agents. It is a different company with a different rate structure, so your rates could be higher or lower.
afan
Posts: 5905
Joined: Sun Jul 25, 2010 4:01 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by afan »

hachiko wrote: Sun May 23, 2021 1:25 pm
oldfort wrote: Sun May 23, 2021 1:03 pm
hachiko wrote: Sun May 23, 2021 12:59 pm
oldfort wrote: Sun May 23, 2021 12:40 pm
hachiko wrote: Sun May 23, 2021 12:38 pm Homeowners and renters insurance policies rarely cover libel.
This isn't true. My homeowner's covers libel and I'm with one of the mass market carriers.
So you have a personal injury endorsement. Your anecdotal statement that your policy covers it doesn't mean my statement is false. I did not say "no homeowners policies cover it."
If you insist on a source:
Yep. Strange as it may seem, most homeowner’s policies cover claims for defamation and related torts, libel and slander.
https://www.insurancejournal.com/magazi ... 305360.htm
OK, fair, you may be right.

There's also this which contradicts https://www.paulsoncoletti.com/do-you-n ... ce-policy/

Anyway, I would probably agree that my claim "rarely" is incorrect.
The problem may be in the language "standard policy". There is not a single standard policy. There are common HO3 and HO 5 forms. I believe HO5 does include this sort of liability. I don't know about HO3. Some big insurers use neither and have their own forms.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
afan
Posts: 5905
Joined: Sun Jul 25, 2010 4:01 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by afan »

willthrill81 wrote: Sun May 30, 2021 10:10 am
True. But neither a plaintiff nor a plaintiff's attorney is likely to want to wait potentially many years for me to voluntarily decide to start withdrawing those funds.
Of course, it will only be many years if the defendant is younger. An older defendant may already be taking out retirement money to live on, or to satisfy RMDs.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
afan
Posts: 5905
Joined: Sun Jul 25, 2010 4:01 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by afan »

Vettepilot wrote: Tue May 18, 2021 8:50 pm PI lawyer here. Generally, we do only go after insurance. But in cases where the insurance limits are insufficient and the defendant has significant assets, I have an ethical obligation to pursue recovery for my client. Part of this decision is also based on whether the defendant carried reasonable insurance. If the D had a large taxable account or cash in the bank, but chose to carry state minimum auto limits, I'm going after his assets. If he had the same assets, but chose to carry 500k limits, he has taken reasonable steps to protect others, and that weighs in the decision I'm going to make with my client.

I personally carry a large umbrella policy. Also very high undersinsured/uninsured limits. I have seen both come in handy.
Vettepilot,

Can you tell us how much is your "large" umbrella policy? $1M, $5M? More?
Same question about "very high" UI coverage. I have seen $1M/$1M as a common figure. Is this enough?

elnegativo and talzara, same questions. How much is enough?
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
loghound
Posts: 50
Joined: Thu May 09, 2019 7:01 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by loghound »

I'm sure others haves noted this but the PUP also buys you litigation insurance. A largish ($1M-$2M) pricy is enough to have the insurance company put their 'crack legal team' on the job to minimize losses....
deltaneutral83
Posts: 1885
Joined: Tue Mar 07, 2017 4:25 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by deltaneutral83 »

If you operate an automobile, this isn't much of a discussion at the price points of PUP coverage. I want the insurance company's dollars and their legal team backing me. ERISA, homestead laws, etc. is certainly cute banter, but I want cold hard cash (a lot more than auto limits) backing me up if someone in my household is at fault in an auto accident. I don't care what I have in ERISA protected accounts, taxable, my kid's piggy bank, bitcoin, whatever, it's too cheap to go without.
oldfort
Posts: 2649
Joined: Mon Mar 02, 2020 8:45 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by oldfort »

afan wrote: Tue Jun 08, 2021 12:26 pm
hachiko wrote: Sun May 23, 2021 1:25 pm
oldfort wrote: Sun May 23, 2021 1:03 pm
hachiko wrote: Sun May 23, 2021 12:59 pm
oldfort wrote: Sun May 23, 2021 12:40 pm

This isn't true. My homeowner's covers libel and I'm with one of the mass market carriers.
So you have a personal injury endorsement. Your anecdotal statement that your policy covers it doesn't mean my statement is false. I did not say "no homeowners policies cover it."
If you insist on a source:
Yep. Strange as it may seem, most homeowner’s policies cover claims for defamation and related torts, libel and slander.
https://www.insurancejournal.com/magazi ... 305360.htm
OK, fair, you may be right.

There's also this which contradicts https://www.paulsoncoletti.com/do-you-n ... ce-policy/

Anyway, I would probably agree that my claim "rarely" is incorrect.
The problem may be in the language "standard policy". There is not a single standard policy. There are common HO3 and HO 5 forms. I believe HO5 does include this sort of liability. I don't know about HO3. Some big insurers use neither and have their own forms.
If you read the comment from the person who works in insurance, I think Talzara, up above, 85% of the umbrella risk is excess auto liability, 15% is excess homeowners liability, and dropdown claims are rounding error.
tj
Posts: 4400
Joined: Thu Dec 24, 2009 12:10 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by tj »

talzara wrote: Sun May 30, 2021 12:40 pm
SlowMovingInvestor wrote: Sun May 30, 2021 11:49 am Why do so many insurance companies want you to have home or auto with them before they'll sell you umbrella ? Indeed some companies such as Travelers wouldn't sell you umbrella even if you have home (but not auto) with them ? If Umbrella is profitable stand alone, why don't more of the larger companies sell it stand alone ?
Standalone umbrella appears to have lower claim frequencies than supported umbrella. It may be because plaintiffs have a harder time finding out about a standalone umbrella.

That makes it impossible to sell standalone umbrella in the same company as supported umbrella. The regulators allow multipolicy discounts, but they don't allow multipolicy surcharges. An insurer would have to write standalone umbrella in a separate company that has different base rates. Most large insurers believe that the market is too small to justify a separate underwriting company, so they don't sell standalone at all.

Berkshire Hathaway is the only large insurer that does it. GEICO writes supported umbrella, and USLI writes standalone umbrella. Even if GEICO turns you down for supported umbrella, it won't refer you to USLI.
I don't believe you are correct. Auto-Owners sells Umbrella to their auto/home clients, and also sells umbrella to anyone.
Last edited by tj on Wed Jun 09, 2021 10:50 pm, edited 1 time in total.
talzara
Posts: 1691
Joined: Thu Feb 12, 2009 7:40 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by talzara »

tj wrote: Wed Jun 09, 2021 8:30 am
talzara wrote: Sun May 30, 2021 12:40 pm An insurer would have to write standalone umbrella in a separate company that has different base rates. Most large insurers believe that the market is too small to justify a separate underwriting company, so they don't sell standalone at all.

Berkshire Hathaway is the only large insurer that does it. GEICO writes supported umbrella, and USLI writes standalone umbrella. Even if GEICO turns you down for supported umbrella, it won't refer you to USLI.
I don't believe you are correct. Auto-Owners sounds Umbrella to their auto/home clients, and also sells umbrella to anyone.
I said that Berkshire Hathaway is the only large insurer that does it. I didn't say that it's the only insurer. If you've seen the Florida homeowners insurance thread, I consider Amica to be a small insurer. Auto-Owners is a medium-sized insurer.

Auto-Owners sells standalone umbrella. There is a second underwriting company called Home Owners that sells supported umbrella. This is the same thing that Berkshire Hathaway does with GEICO and USLI: two separate companies to sell two separate policies.

Since they are sold by two separate companies, the standalone and supported umbrella policies are also slightly different. There are several exclusions in the standalone umbrella policy that are not in the supported umbrella policy. Here is a table that summarizes the differences: https://www.irmi.com/docs/default-sourc ... n-2012.pdf

Edit 1: Linked to differences between the two policies.
Edit 2: Added the underwriting companies.
Last edited by talzara on Wed Jun 09, 2021 2:46 pm, edited 2 times in total.
talzara
Posts: 1691
Joined: Thu Feb 12, 2009 7:40 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by talzara »

afan wrote: Tue Jun 08, 2021 12:26 pm
hachiko wrote: Sun May 23, 2021 1:25 pm OK, fair, you may be right.

There's also this which contradicts https://www.paulsoncoletti.com/do-you-n ... ce-policy/

Anyway, I would probably agree that my claim "rarely" is incorrect.
The problem may be in the language "standard policy". There is not a single standard policy. There are common HO3 and HO 5 forms. I believe HO5 does include this sort of liability. I don't know about HO3. Some big insurers use neither and have their own forms.
The words "libel" and "slander" do not appear at all in the ISO HO-3 and HO-5 policies.

However, "policy" can also refer to the entire policy packet, including endorsements. Some insurance companies may include the endorsement by default. In addition, some insurance companies may write the endorsement into the policy itself.

Most of the large homeowner insurers have either modified the ISO policy or written a custom policy.
afan
Posts: 5905
Joined: Sun Jul 25, 2010 4:01 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by afan »

oldfort wrote: Tue Jun 08, 2021 9:57 pm

If you read the comment from the person who works in insurance, I think Talzara, up above, 85% of the umbrella risk is excess auto liability, 15% is excess homeowners liability, and dropdown claims are rounding error.
Right. But the discussion to which I was responding concerned liability coverage included in "standard" homeowners policies. Auto and umbrella have nothing to do with what is covered by homeowners. Some homeowners policies include liability some do not.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
afan
Posts: 5905
Joined: Sun Jul 25, 2010 4:01 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by afan »

talzara wrote: Wed Jun 09, 2021 2:09 pm
afan wrote: Tue Jun 08, 2021 12:26 pm
hachiko wrote: Sun May 23, 2021 1:25 pm OK, fair, you may be right.

There's also this which contradicts https://www.paulsoncoletti.com/do-you-n ... ce-policy/

Anyway, I would probably agree that my claim "rarely" is incorrect.
The problem may be in the language "standard policy". There is not a single standard policy. There are common HO3 and HO 5 forms. I believe HO5 does include this sort of liability. I don't know about HO3. Some big insurers use neither and have their own forms.
The words "libel" and "slander" do not appear at all in the ISO HO-3 and HO-5 policies.

However, "policy" can also refer to the entire policy packet, including endorsements. Some insurance companies may include the endorsement by default. In addition, some insurance companies may write the endorsement into the policy itself.

Most of the large homeowner insurers have either modified the ISO policy or written a custom policy.
Does that mean they are not excluded in all perils policies? Therefore covered?
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
WapelloHawk
Posts: 7
Joined: Thu Apr 08, 2021 4:22 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by WapelloHawk »

I just increased our umbrella limits with USAA, went from $1mm to $3mm.

Things I learned:

Homeowners policy can include a personal injury liability rider that is very cheap. Ours was less than $2 per month extra.

The umbrella premium is dependent upon the people living in your household, coverage limit, properties you own, and cars on your auto coverage.

Our premium is high for a few main reasons.

We have a 22 year old daughter still living at home for another fee months. Her car and auto insurance are in her name, but she is under our roof, so covered by our umbrella. Roughly 15% of our premium is directly tied to her.

Much more costly though is our 20 year old son. He totaled a car a year and, although he is away at college most of the year, he is still considered under our roof. Roughly 50% of our premium is directly tied to him.

Once our kids are living own their own, our premium will decrease around 67% (I had USAA run “what if” scenarios when I increased our coverage).

So, at least with USAA, the policy limits may be the same from one family to another, but the premium can vary widely depending on circumstances.
Swimmer
Posts: 536
Joined: Tue Dec 29, 2015 4:24 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Swimmer »

Jablean wrote: Sat May 29, 2021 2:55 am
BigoteGato wrote: Fri May 28, 2021 11:44 pm
Hues10 wrote: Thu May 20, 2021 5:55 am Funny, I asked about obtaining PUP a couple of days ago for someone who does have net worth in non-taxable accounts in six figures. The response was yes, which makes sense to me as right now I have $300k liability. Now the question is how much coverage? Is $1m adequate? I received a quote from Progressive for $2m coverage for about $650/year, which seems expensive given one poster indicated they pay $150 for $1m coverage.
I would love your quote. I’m paying $604 for $1M. I was paying about that for $2M in a previous state.
BG
Me too, mine's running at $700 for $1M
We just got a renewal notice of about $550 for 1M. Those low rates don’t apply to us. Florida.
User avatar
JAZZISCOOL
Posts: 1597
Joined: Sat May 18, 2019 11:49 am
Location: Colorado - 5,700 ft.

Re: Don’t need a PUP? [personal umbrella policy]

Post by JAZZISCOOL »

michaeljc70 wrote: Wed May 19, 2021 8:44 am I think your neighbor is giving general advice that applies to most situations because most people have nothing in recoverable assets. Most people, if they have anything, have a residence and/or retirement accounts.

I had a friend that a few years ago was sued for more than his HO policy. A neighbor was walking on the sidewalk, approached my friend's dog (through a fence, never at risk of a bite), the dog barked and startled her and she fell and broke her arm (needing surgery). The dog was a French bulldog. He has a $300k policy and they sued for $500k (or something like that). It was a very stressful year for my friend. They eventually settled for the policy limit.
Interesting outcome. I wonder what would happen if the friend had put up a "beware of dog" sign in advance of this; and if that would relieve him/her of liability? (even if the dog is friendly)
talzara
Posts: 1691
Joined: Thu Feb 12, 2009 7:40 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by talzara »

afan wrote: Wed Jun 09, 2021 3:24 pm
talzara wrote: Wed Jun 09, 2021 2:09 pm The words "libel" and "slander" do not appear at all in the ISO HO-3 and HO-5 policies.
Does that mean they are not excluded in all perils policies? Therefore covered?
It's usually called open perils coverage. "All perils" is misleading because the policy doesn't actually cover all perils.

For liability, the ISO HO-3 and HO-5 policies cover only bodily injury and property damage. There is no coverage for libel and slander, which injure the person's reputation instead of his body:
If a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies, we will:

1. Pay up to our limit of liability for the damages for which an "insured" is legally liable.
There is an ISO endorsement that covers libel and slander. As with any endorsement, an insurer can make it either mandatory or optional. Most insurers charge an additional premium.
Post Reply