How much Umbrella Insurance?

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plover
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How much Umbrella Insurance?

Post by plover » Mon May 23, 2016 9:50 pm

The "Index Card" book recommends twice your net worth, without explaining how they came up with that figure.
What is considered a normal amount of liability insurance? 1x your net worth? More?
Thanks -

Teague
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Re: How much Umbrella Insurance?

Post by Teague » Mon May 23, 2016 10:51 pm

Welcome to the forum!

I'm not sure there is a "normal" amount, but I'd think covering your current net worth would be minimum. Know that judgments can tap your future earnings, not just what you have accumulated.
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LAlearning
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Re: How much Umbrella Insurance?

Post by LAlearning » Mon May 23, 2016 11:10 pm

A million is cheap. Start there.
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avalpert
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Re: How much Umbrella Insurance?

Post by avalpert » Mon May 23, 2016 11:16 pm

I see no reason why Umbrella Insurance coverage should be tied to your net worth - it should be based on your potential liabilities.

What liabilities might you be exposed to? Anything about your situation that would make it different than the average wage earner?

Iridium
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Re: How much Umbrella Insurance?

Post by Iridium » Mon May 23, 2016 11:24 pm

The purpose of liability insurance when you start talking about amounts in the millions has more to do with tempting the plaintiff into settling than to necessarily fully cover the plaintiff's damages. Most likely, if you have blown through a $1 MM policy, it is because you killed someone, and the 'damages' to his/her family are unquantifiable at that point (seriously, I searched for hours and found no forumula for calculating the value of a human life, as best I can tell it comes down entirely to the jury's discretion, which seems to generate some fairly erratic results).

Hypothetically if you killed someone, and the jury found their life to be worth $15 million, there is just no way you are going to be insured against that. So, your best course of action would be to run from the courtroom to the clerk to file for Chapter 11 (it's not just for corporations, but extremely rare for individuals since Chapter 13 is a better fit when your debts are <$350,000) before the plaintiff has a chance to file any liens or garnish any wages. If you do so, the plaintiffs will receive your insurance payouts (auto + umbrella liability limits) and your Chapter 11 estate. If the plaintiff's choose to settle for limits*, they would receive just your insurance payouts. The goal is to make the insurance payout large enough that the pain, agony, delay, and risk in taking the case to trial in order to get your Chapter 11 estate just doesn't seem worth it. For example, if your umbrella is $2MM and your Chapter 11 estate is worth $200,000, then, going to trial for $2.2MM instead of settling for $2MM is pretty unappealing.

The old rule of thumb about owning insurance to match your net worth corresponds nicely with the old saying 'a bird in hand is better than two in the bush', in this case, a $200K insurance settlement is better than a $200K insurance payout + $200K Chapter 11 estate. However, I'm not so certain a plaintiff wouldn't try to double their payout by forcing the case to trial. The old rule of thumb was also created before the current bankruptcy regime. These days, your bankruptcy estate could be larger or smaller than your net worth, and I believe that your bankruptcy estate has much more to do with insurance than your net worth.

My personal rule is 2-3 times the size of my Chapter 11 estate. Can't really justify exactly, except that I think people are unlikely to go to trial for an extra 50% or 33%. Also, if your insurance is twice the size of your estate, a contingency lawyer's fee would eat up the entire amount extra a plaintiff could get by going to trial. I would hope that there would be ways to convince the plaintiff to settle for insurance limits and hire an hourly contracts lawyer, rather than go through the pain of trial with a contingency lawyer to get the same amount of money, though, admittedly, this seems tenuous. However, if your net worth is greater than 2-3 times your Chapter 11 estate (because it is almost entirely in protected assets and you are retired), I would strongly consider using the old net worth rule of thumb. You don't want a plaintiff so angry that they can only get $1MM when your net worth is $5MM that they decide to hassle you, even though it might only actually benefit them to the tune of $250K or so.

One final note: drunk driving damages are not dischargeable in bankruptcy. So, if you plan on having a few then driving then you pretty much have to replace every reference to 'Chapter 11' with 'entire net worth plus future earnings' (there are exceptions for social security and possibly some other retirement assets). Unfortunately, I think you can run into this even if you don't blow an 0.08. If you blow an 0.05 and were found at fault for the accident, the court is going to be pretty tempted to say the alcohol clearly influenced you, since you got in an accident (don't expect the insurance company lawyer to help you out by arguing that you are a bad enough driver you would have caused that accident while completely sober; the insurance company doesn't care what happens post-trial). Better yet, put the difference in premium between 2-3 x 'Chapter 11' and 2-3 x 'net worth plus earnings' toward cab/Uber fares.

* It does not matter if the insurance company actually accepts said settlement. As soon as the settlement offer at insurance limits is made, you are home free. If the insurance company does not accept the offer an then you end up going to trial and getting a judgement of $15 million slapped on you, you can turn around and sue the insurance company for the difference. The insurance company has a duty to accept reasonable settlement offers, if the courts found the case to be worth more than your insurance limits, then a settlement offer at your insurance limits was apparently reasonable (even if, in most people's opinions both the settlement offer and the court's findings were unreasonable).

boglerdude
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Re: How much Umbrella Insurance?

Post by boglerdude » Tue May 24, 2016 12:43 am

Get 1MM underlying auto&homeowners and 1MM umbrella. Very unlikely you'll cause more than 2MM actual damages. Judgements larger than that are usually to send a message to a company that actually has that kind of money.

IRAs and 401ks are sometimes protected. Consider getting a dash cam. If you do get sued for millions you'll want your own attorney to consult on the side, to make sure your auto insurance attorney is making a huge effort to settle.

anoop
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Re: How much Umbrella Insurance?

Post by anoop » Tue May 24, 2016 12:45 am

Iridium wrote: My personal rule is 2-3 times the size of my Chapter 11 estate.
If you have some pointers to what a Chapter 11 estate consists of that would be much appreciated.

Thanks.

HIinvestor
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Re: How much Umbrella Insurance?

Post by HIinvestor » Tue May 24, 2016 12:58 am

Check in to the difference in the cost of the premiums for the different coverages. Originally, we had $1MM in coverage. The premium has gone down, so now we have $3MM in coverage for less than we had paid for $1MM in coverage. I would like to be able to be reasonably sure I could pay for any damages I and my loved ones may cause another rather than expecting to declare bankruptcy and having someone I harm left both terribly injured and broke, as well as me and my family being broke.

One thing I noticed when I was a trial attorney, many of the best attorneys were always hired by the umbrella insurers. They would work with the defense attorneys to provide a vigorous defense but also try to see if there was a way to fairly resolve the case. I like sleeping well at night and an umbrella policy is actually significantly cheaper than maxing out on the auto policy and the umbrella policy kicks in where the auto policy (and homeowner's) ends, to provide good protection.

Iridium
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Re: How much Umbrella Insurance?

Post by Iridium » Tue May 24, 2016 1:24 am

anoop wrote:
Iridium wrote: My personal rule is 2-3 times the size of my Chapter 11 estate.
If you have some pointers to what a Chapter 11 estate consists of that would be much appreciated.

Thanks.
I can't claim to be an expert, this is a piece I am a bit less than confident about, but I'm sure someone will be along to correct me if I am wrong. So here goes:

For an individual, Chapter 11 bankruptcy should end up going similar to Chapter 13. It isn't mandated, but it seems to be a reasonable first approximation. In Chapter 13, the total amount available to your unsecured creditors is the greater of:

1) Five years of disposable income (subtract mortgage and auto payments plus a few other things from your income, see more here: http://www.nolo.com/legal-encyclopedia/ ... -plan.html)
2) Your total assets minus secured debt and bankruptcy exemptions, which vary by state. You never have to include any money in 401ks and only have to include IRAs to the extent that they are over $1.25MM. More details can be found by looking up your state: http://www.nolo.com/legal-encyclopedia/ ... exemptions

carolinaman
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Re: How much Umbrella Insurance?

Post by carolinaman » Tue May 24, 2016 6:29 am

When I increased my umbrella insurance from $1M, my insurance company thought that was relatively rare, at least among their policyholders. The insurance is so cheap, I now have $3M coverage.

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Re: How much Umbrella Insurance?

Post by goingup » Tue May 24, 2016 8:18 am

boglerdude wrote:Get 1MM underlying auto&homeowners and 1MM umbrella. Very unlikely you'll cause more than 2MM actual damages.
This is how I reasoned when I bought a $1M umbrella.

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plover
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Re: How much Umbrella Insurance?

Post by plover » Tue May 24, 2016 8:38 am

Thanks for your thoughtful replies. We don't have a situation that is out of the ordinary in terms of exposing ourselves to more liability than the average person. But our net worth has gone up substantially from when we purchased our first million in umbrella insurance.
One example given of when a lot of umbrella insurance may come in handy is the following situation: there is an accident on the freeway causing a ten-car pileup, and you are determined to be at fault. So there are ten people suing you for damages to their cars, injuries, etc.

It is true that umbrella insurance is relatively cheap. Still, 1x vs. 2x is a big difference.

amphora
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Re: How much Umbrella Insurance?

Post by amphora » Tue May 24, 2016 9:02 am

Playing devils advocate: Is there any concern that a large umbrella insurance will make you the target of more lawsuits?

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Re: How much Umbrella Insurance?

Post by Da5id » Tue May 24, 2016 9:06 am

amphora wrote:Playing devils advocate: Is there any concern that a large umbrella insurance will make you the target of more lawsuits?
People don't know you have large umbrella insurance until they sue, so why would you be a bigger target?

Dandy
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Re: How much Umbrella Insurance?

Post by Dandy » Tue May 24, 2016 3:03 pm

It is relatively cheap and avoids a lot of deep risk of being sued. None of us is immune from being sued for millions. One moment of inattention at the wheel and could ruin a life of a carful of people. If your work, hobbies or personal habits tend to put others at risk you may need more. It is amazing what people sue for and what they collect.

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plover
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Re: How much Umbrella Insurance?

Post by plover » Tue May 24, 2016 9:27 pm

This is what I am thinking, Dandy. On to shopping for additional umbrella insurance. Thanks to all!

boglephreak
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Re: How much Umbrella Insurance?

Post by boglephreak » Tue May 24, 2016 10:06 pm

i have 2mm umbrella because (1) it wasnt that much more expensive than 1mm; (2) i have three rental properties; and (3) i live in california where judgments are higher. i thought about getting more, but didnt think it was worth it. $2mm plus my auto or homeowners should cover most lawsuits.

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Re: How much Umbrella Insurance?

Post by freddie2011 » Tue May 31, 2016 4:27 pm

I recently increased our umbrella policy from $1M to $2M for only an additional $90/year. We are retirees and could be financially devastated if we were ever sued. Recent lawsuits against two people we know propelled me into action.

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Toons
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Re: How much Umbrella Insurance?

Post by Toons » Tue May 31, 2016 10:27 pm

FYI
Umbrella Insurance
"The first $1 million coverage will cover all of the nuisance lawsuits. This coverage is important. However, we recommend having at least $2 million in coverage of umbrella insurance."

http://www.figuide.com/how-much-umbrell ... -need.html


:D
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

epoxyresin
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Re: How much Umbrella Insurance?

Post by epoxyresin » Wed Jun 01, 2016 3:48 am

avalpert wrote:I see no reason why Umbrella Insurance coverage should be tied to your net worth - it should be based on your potential liabilities.

What liabilities might you be exposed to? Anything about your situation that would make it different than the average wage earner?
It should be somewhat tied to your net worth, because that will determine how willing someone is to sue you. Say you have a a $1 million insurance policy and $5 million in assets. You cause $5 million in damages. If they have a good case, there's not much incentive to settle. Insurance will pay your defense, and when they win they'll get the $1 million from insurance and take the rest from you. On the other hand, suppose you have $1 million insurance and $500,000 in assets. You cause $5 million in damages. The injured party could settle and take the $1 million payout from insurance, but if they sue the max they get is $1.5 million Need to pay lawyers who will take 30% of that, going to be a long and emotionally painful process, they're still not going to be made anywhere near whole, there's a chance they'll lose. Settling for that million starts to look like a real good option.

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janiebegood
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Re: How much Umbrella Insurance?

Post by janiebegood » Wed Jun 01, 2016 7:59 am

Toons wrote:FYI
Umbrella Insurance
"The first $1 million coverage will cover all of the nuisance lawsuits. This coverage is important. However, we recommend having at least $2 million in coverage of umbrella insurance."

http://www.figuide.com/how-much-umbrell ... -need.html

:D
Very helpful article. Thank you!

ArmchairArchitect
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Re: How much Umbrella Insurance?

Post by ArmchairArchitect » Wed Jun 01, 2016 8:46 am

Was pondering this same question when I was shopping for umbrella insurance.

What would really help answer the question is seeing statistics on the amounts awarded for personal liability lawsuits. Looking at the averages and percentiles.

avalpert
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Re: How much Umbrella Insurance?

Post by avalpert » Wed Jun 01, 2016 8:49 am

epoxyresin wrote:
avalpert wrote:I see no reason why Umbrella Insurance coverage should be tied to your net worth - it should be based on your potential liabilities.

What liabilities might you be exposed to? Anything about your situation that would make it different than the average wage earner?
It should be somewhat tied to your net worth, because that will determine how willing someone is to sue you. Say you have a a $1 million insurance policy and $5 million in assets. You cause $5 million in damages. If they have a good case, there's not much incentive to settle. Insurance will pay your defense, and when they win they'll get the $1 million from insurance and take the rest from you. On the other hand, suppose you have $1 million insurance and $500,000 in assets. You cause $5 million in damages. The injured party could settle and take the $1 million payout from insurance, but if they sue the max they get is $1.5 million Need to pay lawyers who will take 30% of that, going to be a long and emotionally painful process, they're still not going to be made anywhere near whole, there's a chance they'll lose. Settling for that million starts to look like a real good option.
I'm not sure the calculus makes much sense. What is the difference in expected outcome if the one with $500k in assets had no insurance? Isn't the marginal value of them suing you and taking it to court exactly the same as if you had $1 million? Are we assuming that plaintiffs are irrational?

What's more, the one with only $500k in assets is taking the risk of complete bankruptcy (and future wager garnishment) whereas the one with $5 million in assets, while certainly devastating, is still solvent after the liability is covered. The one with only $500 in assets has a higher need to reduce value-at-risk through insurance coverage than the one with $5 million in assets.

avalpert
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Re: How much Umbrella Insurance?

Post by avalpert » Wed Jun 01, 2016 9:05 am

ArmchairArchitect wrote:Was pondering this same question when I was shopping for umbrella insurance.

What would really help answer the question is seeing statistics on the amounts awarded for personal liability lawsuits. Looking at the averages and percentiles.
Agreed, the rest feels like anchoring around big sounding numbers.

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Re: How much Umbrella Insurance?

Post by orlandoman » Wed Jun 01, 2016 9:06 am

It is important when considering your asset liability for a possible umbrella policy, that you look up the assets that are protected from judgement in your specific state.

In Florida, where I live, assets that are protected from judgement include: your house (homestead), head of household wages, cash value in life ins. policies & annuities, IRA's and more. Social security benefits, including both social security income and disability, are exempt from creditor garnishment under Section 207 of the Social Security Act. Do research & verify.

So, your assets at risk may be much less than you might consider at first look.
"Don't Believe Everything You Think"

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Re: How much Umbrella Insurance?

Post by afan » Wed Jun 01, 2016 10:22 am

When doing estate and asset protection planning, my attorney said "get a lot. It is cheap and simpler than complex strategies that have ongoing costs"

In my state the life insurance cash value protection is limited, then the death benefit is protected only under specific circumstances. It is best of the insured does not own the policy and the policy is not payable to the insured's estate. Retirement accounts protected until you take money out. So once RMDs start those amounts are fair game for creditors. Homestead protection is limited and less than the cost of many of the houses in my high cost of living area. But it does vary by state.
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Re: How much Umbrella Insurance?

Post by Toons » Wed Jun 01, 2016 10:59 am

janiebegood wrote:
Toons wrote:FYI
Umbrella Insurance
"The first $1 million coverage will cover all of the nuisance lawsuits. This coverage is important. However, we recommend having at least $2 million in coverage of umbrella insurance."

http://www.figuide.com/how-much-umbrell ... -need.html

:D
Very helpful article. Thank you!
My Pleasure :happy
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hoops777
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Re: How much Umbrella Insurance?

Post by hoops777 » Wed Jun 01, 2016 11:17 am

Just curious what premiums people are paying for 1 or 2 million?
K.I.S.S........so easy to say so difficult to do.

wxz76
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Re: How much Umbrella Insurance?

Post by wxz76 » Wed Jun 01, 2016 11:21 am

hoops777 wrote:Just curious what premiums people are paying for 1 or 2 million?
$260 for 2M with Farmers.

bbqguru
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Re: How much Umbrella Insurance?

Post by bbqguru » Wed Jun 01, 2016 11:27 am

$575 per year. 1 million Chubb

2 personal vehicles, 1 company owned vehicle and home. 2 people, no children.

epoxyresin
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Re: How much Umbrella Insurance?

Post by epoxyresin » Wed Jun 01, 2016 11:31 am

avalpert wrote:
epoxyresin wrote:
avalpert wrote:I see no reason why Umbrella Insurance coverage should be tied to your net worth - it should be based on your potential liabilities.

What liabilities might you be exposed to? Anything about your situation that would make it different than the average wage earner?
It should be somewhat tied to your net worth, because that will determine how willing someone is to sue you. Say you have a a $1 million insurance policy and $5 million in assets. You cause $5 million in damages. If they have a good case, there's not much incentive to settle. Insurance will pay your defense, and when they win they'll get the $1 million from insurance and take the rest from you. On the other hand, suppose you have $1 million insurance and $500,000 in assets. You cause $5 million in damages. The injured party could settle and take the $1 million payout from insurance, but if they sue the max they get is $1.5 million Need to pay lawyers who will take 30% of that, going to be a long and emotionally painful process, they're still not going to be made anywhere near whole, there's a chance they'll lose. Settling for that million starts to look like a real good option.
I'm not sure the calculus makes much sense. What is the difference in expected outcome if the one with $500k in assets had no insurance? Isn't the marginal value of them suing you and taking it to court exactly the same as if you had $1 million? Are we assuming that plaintiffs are irrational?

What's more, the one with only $500k in assets is taking the risk of complete bankruptcy (and future wager garnishment) whereas the one with $5 million in assets, while certainly devastating, is still solvent after the liability is covered. The one with only $500 in assets has a higher need to reduce value-at-risk through insurance coverage than the one with $5 million in assets.
The marginal value is not the same, because settling with insurance means they are precluded from suing you.

If you have $500,000 and no insurance: they have to sue you if they want anything. They win they get your 500k, they lose they get nothing.

If you have $500,000 and a $1 million insurance policy: if they settle for policy limits, they get the $1 million, but are precluded from going after you for the rest. They don't get to settle with the insurance company for policy limits and then sue you for the rest of it. If they sue they get 1.5 million if they win (insurance + assets), but it costs more to sue than to settle so they might not actually end up with much more, plus there's a possibility that they lose and get nothing.

You're certainly correct that the potential liability needs to be taken into account, as well as the degree to which someone has enough assets to self-insure. Net worth is certainly not the only consideration when choosing how much insurance to get.

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JPH
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Re: How much Umbrella Insurance?

Post by JPH » Wed Jun 01, 2016 11:59 am

Paying $355 for $2 million this year with Allstate. Last year it cost $304.
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HIinvestor
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Re: How much Umbrella Insurance?

Post by HIinvestor » Wed Jun 01, 2016 12:10 pm

I believe we pay $300 for $3MM in coverage.

foreverihope
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Re: How much Umbrella Insurance?

Post by foreverihope » Wed Jun 01, 2016 12:16 pm

umbrella for 2 m is over 680 in south florida and half that in wash dc for the same circumstances, look up your area, it can change a lot on zip code( live in fraud capital of the world) I used different zip codes only , same house and everything, and called and asked.

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Re: How much Umbrella Insurance?

Post by neilpilot » Wed Jun 01, 2016 12:46 pm

foreverihope wrote:umbrella for 2 m is over 680 in south florida and half that in wash dc for the same circumstances, look up your area, it can change a lot on zip code( live in fraud capital of the world) I used different zip codes only , same house and everything, and called and asked.
But did you also check different insurers? I just shopped 2M policy, and was quoted a $272-$493 range for the same limits and exposures (and same zip code). Guess which I purchased :D

boglephreak
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Re: How much Umbrella Insurance?

Post by boglephreak » Wed Jun 01, 2016 12:50 pm

about $300 with Geico for $2MM. however, Geico gives you a discount on your auto policy if you have umbrella insurance, which is substantial (i think around $150-199). i recall thinking that the first million was basically free, and added on a second million just in case.

afan
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Re: How much Umbrella Insurance?

Post by afan » Wed Jun 01, 2016 12:56 pm

We also found big differences in price for the same coverage
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azanon
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Re: How much Umbrella Insurance?

Post by azanon » Wed Jun 01, 2016 1:23 pm

Do you have to have the max "base" coverage on your auto before umbrella kicks in, or could you theoretically set your base auto limits really low, then get 1 mil in umbrella? I'm not sure exactly how that works.

sfchris
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Re: How much Umbrella Insurance?

Post by sfchris » Wed Jun 01, 2016 1:26 pm

I say this in all Umbrella threads: Be aware that Umbrella Insurance is not standardized like other insurance. What it covers and doesn't cover varies widely. There are subtle complications, such as if you are a member of a non-profit board, etc. Without reading the policy, you should not make assumptions about what is covered.

If you are serious, you should purchase umbrella insurance from an agent who has thoroughly researched the umbrella insurance they offer.

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1210sda
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Re: How much Umbrella Insurance?

Post by 1210sda » Wed Jun 01, 2016 1:39 pm

orlandoman wrote:It is important when considering your asset liability for a possible umbrella policy, that you look up the assets that are protected from judgement in your specific state.

In Florida, where I live, assets that are protected from judgement include: your house (homestead), head of household wages, cash value in life ins. policies & annuities, IRA's and more. Social security benefits, including both social security income and disability, are exempt from creditor garnishment under Section 207 of the Social Security Act. Do research & verify.

So, your assets at risk may be much less than you might consider at first look.
This is how I see it also.

1210

inbox788
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Re: How much Umbrella Insurance?

Post by inbox788 » Wed Jun 01, 2016 1:42 pm

bbqguru wrote:$575 per year. 1 million Chubb

2 personal vehicles, 1 company owned vehicle and home. 2 people, no children.
That seems expensive. Where do you live? I'm in SoCal and got 2M with Chubb employer based group policy for less than that (about $350 off the top of my head). I got some quotes for individual policies and were in the same ballpark ($200-400) depending on what was covered. Seemed like the individual policies asked more questions and was more specific about coverage. I'm still not clear, but the group policy didn't seem to care. I haven't scoured over the fine print to see if I have any holes, but it was easier to click a box than to bother with comparing the individual companies in detail. I'm in a better situation than before without umbrella. Oh and the individual companies wanted detailed policies info before they would underwrite, whereas the group policy would allow me to have a gap if I wasn't adequately insured. At least that was my understanding.
sfchris wrote:I say this in all Umbrella threads: Be aware that Umbrella Insurance is not standardized like other insurance. What it covers and doesn't cover varies widely. There are subtle complications, such as if you are a member of a non-profit board, etc. Without reading the policy, you should not make assumptions about what is covered.

If you are serious, you should purchase umbrella insurance from an agent who has thoroughly researched the umbrella insurance they offer.
Where do you find independent insurance agents these days? All the agents I've found are primarily tied to one or another insurance company. I think the days of the independent insurance brokers has gone the same way as the independent travel agents.
azanon wrote:Do you have to have the max "base" coverage on your auto before umbrella kicks in, or could you theoretically set your base auto limits really low, then get 1 mil in umbrella? I'm not sure exactly how that works.
Umbrella polices are excess liability and usually require high baseline coverage (i.e. 250/500/100 or 300 CSL/combined single limit)
Last edited by inbox788 on Wed Jun 01, 2016 1:52 pm, edited 1 time in total.

foreverihope
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Re: How much Umbrella Insurance?

Post by foreverihope » Wed Jun 01, 2016 1:52 pm

foreverihope wrote:
umbrella for 2 m is over 680 in south florida and half that in wash dc for the same circumstances, look up your area, it can change a lot on zip code( live in fraud capital of the world) I used different zip codes only , same house and everything, and called and asked.


But did you also check different insurers? I just shopped 2M policy, and was quoted a $272-$493 range for the same limits and exposures (and same zip code). Guess which I purchased :D


in my parts umbrella is only national, hope your findings come my way.

bbqguru
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Re: How much Umbrella Insurance?

Post by bbqguru » Wed Jun 01, 2016 3:07 pm

inbox788 wrote:
bbqguru wrote:$575 per year. 1 million Chubb

2 personal vehicles, 1 company owned vehicle and home. 2 people, no children.
That seems expensive. Where do you live? I'm in SoCal and got 2M with Chubb employer based group policy for less than that (about $350 off the top of my head). I got some quotes for individual policies and were in the same ballpark ($200-400) depending on what was covered. Seemed like the individual policies asked more questions and was more specific about coverage. I'm still not clear, but the group policy didn't seem to care. I haven't scoured over the fine print to see if I have any holes, but it was easier to click a box than to bother with comparing the individual companies in detail. I'm in a better situation than before without umbrella. Oh and the individual companies wanted detailed policies info before they would underwrite, whereas the group policy would allow me to have a gap if I wasn't adequately insured. At least that was my understanding.
sfchris wrote:I say this in all Umbrella threads: Be aware that Umbrella Insurance is not standardized like other insurance. What it covers and doesn't cover varies widely. There are subtle complications, such as if you are a member of a non-profit board, etc. Without reading the policy, you should not make assumptions about what is covered.

If you are serious, you should purchase umbrella insurance from an agent who has thoroughly researched the umbrella insurance they offer.
Where do you find independent insurance agents these days? All the agents I've found are primarily tied to one or another insurance company. I think the days of the independent insurance brokers has gone the same way as the independent travel agents.
azanon wrote:Do you have to have the max "base" coverage on your auto before umbrella kicks in, or could you theoretically set your base auto limits really low, then get 1 mil in umbrella? I'm not sure exactly how that works.
Umbrella polices are excess liability and usually require high baseline coverage (i.e. 250/500/100 or 300 CSL/combined single limit)

Southwest Missouri. We had an umbrella with a previous carrier and it was in the sub-$300 range. My understanding is that the Chubb umbrella is more of a true umbrella as where most others are form following and just increase limits on base policy. At least that is what my agent explained and the language of the policy seems to indicate it would be a primary policy for some items. I do know that they offer under-insured and un-insured coverage for umbrellas, but it was higher than a kite...

I would think that your group policy is like other group items, economies of scale? Just a shot in the dark.

Approximate breakdown- Home is $150, 2 owned vehicles are $300, and the non-owned endorsement (company vehicle- supposedly covers me if I'm in company car and company insurance doesn't want to play nice) is $125.

The end result is that the umbrella is expensive, but the peace of mind that their auto and home policies provide far outweighs the cost-savings of an alternative umbrella.

sfchris
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Re: How much Umbrella Insurance?

Post by sfchris » Wed Jun 08, 2016 1:11 pm

I mentioned earlier that a big problem is that Umbrella Insurance is not standardized and most of them are very different.

Here is an old paper done by a insurance agent from 2008 that gives you an idea of what I am talking about. The spreadsheet referenced in the article is pretty eye opening although the data is old and shouldn't be relied upon.

http://www.irmi.com/articles/expert-com ... -umbrellas

Spreadsheet:
http://www.irmi.com/docs/default-source ... f?sfvrsn=8

I personally am pretty interested in #28 in his spreadsheet (Excess Uninsured and Underinsured Motorist Available? )

The moral of the story is if you are really serious about this, get an agent!

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siamond
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Re: How much Umbrella Insurance?

Post by siamond » Wed Jun 08, 2016 1:35 pm

sfchris wrote:I mentioned earlier that a big problem is that Umbrella Insurance is not standardized and most of them are very different.
I am in the process of catching up on this topic, ready to sign for a $2m umbrella insurance. I asked our insurance agent for the detailed policy describing said insurance (not available on the Web site of the suggested insurance company), and the only answer I got was "they are all the same". I was pretty sure this was a ridiculous answer, but the Excel spreadsheet you pointed to confirmed it... Not too sure I really care about the differences, to be honest, but sales guys like that lying through their teeth really get under my skin.

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