To "umbrella" or not to "umbrella"...

[Sarah in SC]

Risk and exposure, as corporateburnout mentioned, is the key, not really so much your assets. You can always be sued for more than you have, unfortunately.

We have fairly modest risks and exposure these days, thanks to selling the boat and curtailing our raucous parties at the house in recent years. Though I was glad I had it just in case something happened when we were traveling in our old bus cross-country with 8 friends a couple of years ago. If we'd had an accident that injured more than a couple of them, that policy could have easily been needed.

I'll keep the relatively inexpensive $1M umbrella for the foreseeable future. I figure my savings from a decade of minimum auto coverage back in my 20s when I didn't know better are still being spent.

[ziggy29]

Quote:

Originally Posted by Sarah in SC I'll keep the relatively inexpensive $1M umbrella for the foreseeable future.

Yeah, same here. In fact, I just upped mine from $1M to $2M since it cost only about $5 a month to do so.

[Sarah in SC]

Quote:

Originally Posted by ziggy29 Yeah, same here. In fact, I just upped mine from $1M to $2M since it cost only about $5 a month to do so.

WooHoo! Party at Ziggy's house!

[Fermion]

The real question we should be asking is if these policies will actually protect you. It sounds like you need to be maxed on every other liability policy (and I don't know that we are). My experience with insurance companies is they try very hard not to pay out.

It could be we are paying for peace of mind that we really should not have. But as long as we *think* it protects us, there is some value in the peace of mind even if we are not really protected. But then you should not have read this post as it may have destroyed that value. Sorry.

[rayinpenn]

you say you are well heeled and want to know about whether you need an umbrella policy.. Easy when a vulture considers its next victim it will certainly look for a critter with some meat on its bones...

Get the umbrella now more then ever...
Say Is that some vultures I see circling overhead?


Sent from my iPad using Early Retirement Forum

[NYEXPAT]

Quote:

Originally Posted by aza455 What is the common wisdom as to the need for umbrella insurance for someone who is retired with a few millions in assets? Would be great to get an actual YES (I have one) or NO (I don't have one) in the answer and the rationale behind that answer...

Don't have insurance because I do not have a car and in my country nobody sues anyone. Even doctors here do not have malpractice insurance and when the "odd gringo" talks about suing for some injustice at the local bar/cafe, everybody starts laughing.

[Buckeye]

Quote:

Originally Posted by Jack_Pine Thanks, no young drivers but we have a place in FL with a pool. Appreciate it makes me feel better. Some of what folks are paying seems incredibly low to me though....

I'm in the Orlando area with a pool home and two adult drivers with clean records. $1M is about $200 per year. We go through USAA and they use RLI.

It was $400 when hubby had a fender bender on his record that was under 3 years old.

[Buckeye]

Quote:

Originally Posted by athena53 I agree. Typically it's a catastrophic auto accident with multiple claimants and severe injuries (much more expensive than death claims). I did see one in which the insured rented an expensive vacation home and accidentally caused a fire that destroyed it. There's a liability section of your Homeowners policy that covers such incidents but the umbrella would provide coverage above that if necessary.

I was talking to the USAA rep about Umbrella when we were switching things around and the rep said 80% of Umbrella insurance payouts are related to auto accidents.

[Car-Guy]

Yes, cheap insurance....

[pullmyfinger]

Yes, a 2M policy through USAA. A few years ago I looked at increasing it to 3M but as I remember the premiums took a significant hike.

We also carry earthquake and flood insurance just to protect against a catastrophic loss.

[ziggy29]

Quote:

Originally Posted by Sarah in SC WooHoo! Party at Ziggy's house!

Wait a couple weeks. Our kitchen is being remodeled. And bring beer!

[eyeonFI]

YES, $2 mil for about $250/yr. As others have said, I want the insurance company motivated to defend me if I get sued.

[pb4uski]

Quote:

Originally Posted by Fermion .... It sounds like you need to be maxed on every other liability policy (and I don't know that we are). ...

Not necessarily. Prior to assessing our needs a few years ago we didn't have much liability insurance.

In getting quotes for the umbrella, I found it was cheaper to increase liability coverage on our base policies and get a smaller umbrella than to leave the base policies where they were and get a bigger umbrella. I was not required to max out the coverage of the underlying... even though in my case both the underlying coverages and the umbrella were with the same insurer.

[growing_older]

Yes, I think umbrella insurance is a good idea. I have had a policy for many years and never used it, but I'm glad it's there. I did get sued once by someone without any good reason, but the liability insurance on my auto fought (and won) that one. It did however serve as a concrete example that anyone can sue you for any reason, real or imagined, and I like the idea that my umbrella protects me.

[pmac]

Yes. Very inexpensive insurance for the coverage. While a bit off subject, depending on your state laws, you should also consider maximizing your un and underinsured motorist coverage, which you can generally increase up to the amount of liability coverage under your policy.

My guess is that most folks on this forum have pretty good driving records, but, as we all know, there are a lot idiots driving without any or adequate insurance. In general, if you have 500,000 in liability coverage, but only minimal 10,000 un/underinsured coverage, and you are seriously injured by an un/underinsured driver, the most you would be able to recover on your own policy would be the limit of the un/underinsured motorist coverage. If you increase your un/under motorist coverage to the amount of your liability coverage you can recover up to that limit from your own carrier for your proven damages.

You may aslo you be able to recover from umbrella policy if you had catastrophic injuries, but you would probably have to a minimum amount of underlying un/under coverage before any coverage under the umbrella policy would kick in.

[sheehs1]

Yes…2 million and as much so that the insurance company's lawyers will pursue any high claims as anything else.

[CaliKid]

If one has assets they should have an umbrella policy. No matter how low the assets. Also, someone above mentioned there assets are "protected." Would you sleep better at night, if you get sued, knowing your assets are "protected" or with a one or two mil umbrella policy? No brainer to me.

For us our insurance costs went DOWN by getting it. That is, we used to have $1m coverage on auto for example. However, we changed to umbrella so reduced to $300k coverage (umbrella kicks in over that). We now have $2m and it's about $350 a year I think. I would say it is mandatory. It is too cheap not have.

[audreyh1]

Quote:

Originally Posted by pmac Yes. Very inexpensive insurance for the coverage. While a bit off subject, depending on your state laws, you should also consider maximizing your un and underinsured motorist coverage, which you can generally increase up to the amount of liability coverage under your policy. My guess is that most folks on this forum have pretty good driving records, but, as we all know, there are a lot idiots driving without any or adequate insurance. In general, if you have 500,000 in liability coverage, but only minimal 10,000 un/underinsured coverage, and you are seriously injured by an un/underinsured driver, the most you would be able to recover on your own policy would be the limit of the un/underinsured motorist coverage. If you increase your un/under motorist coverage to the amount of your liability coverage you can recover up to that limit from your own carrier for your proven damages. You may aslo you be able to recover from umbrella policy if you had catastrophic injuries, but you would probably have to a minimum amount of underlying un/under coverage before any coverage under the umbrella policy would kick in.

We pretty much max out on this as there are probably tons of uninsured drivers around here, driving without a license, you name it. I want any occupants in my vehicle well covered.

[COHgirl]

After reading the posts here, I purchased a 2 million policy from USAA effective today.

My homeowners and auto needed to have their limits increased in order to get this. Each premium increased about $20 a year. The umbrella cost is $130.79.

It basically costs us $170 a year for all the extra coverage.

[Walt34]

Quote:

Originally Posted by COHgirl After reading the posts here, I purchased a 2 million policy from USAA effective today.

A wise thing to do. Here's hoping that, like fire insurance, you never need it.