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Old 02-02-2013, 03:01 PM   #41
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It is not a risk that I would take if it was me. I would personally include both policy numbers in giving notice. I think that lessens uncertainty and would be the more prudent course of action for me to take.
Thanks. Better safe than sorry...
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Old 02-02-2013, 04:07 PM   #42
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Is it true one should insure equal to their assets?
The rule of thumb I've been told is net worth + 1M. Obviously I think also depends on other factors like the value of your human capital (e.g., think high income profession even if net worth is low) and how much of your assets are protected.

But the cost is very low (I think I was quoted $200/1M coverage and $300 for 2M for CA which is probably more expensive than other states) so you can also think of it as buying "peace of mind" for peanuts.
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Old 02-02-2013, 04:21 PM   #43
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#1 umbrella policy
#2 lawyer son
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Old 02-02-2013, 05:48 PM   #44
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...As I said, it's a much longer story, but I believe Uncle Sam has some special plans for this clown. And, they are also watched by local and federal law enforcement agencies. I could write a book....

And now you know why I hate investment real estate. But I will forever be a customer of the agency who covered my back side for this lawsuit.
Thank you for the personal experience. Do you mind sharing the name of the insurance company you use?

These kinds of stories keep me from becoming a landlord. So, another thank you for helping me avoid those headaches.

Have you considered at least selling the rights to this story to one of the made for TV producers if you are not going to write that book? If you do write the book, please advertise here or at least PM me; it sounds like it could be a fascinating an cautionary tale.

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Some insurers will only provide umbrella if they also cover auto or homeowners. USAA requires homeowners (IIRC) and State Farm requires auto (our case). Why would an agent talk you out of buying coverage from them - unless they don't sell it.
My agent, who family has used for years, said they had only written a few policies and never seen one invoked. They seemed to consider it a waste of money for me. <cynical>Probably also a waste of time for them since I am guessing comissions on those policies are terrible.</cynical>

I think my company just requires certain minimums on homeowner and auto insurance but does not require those policies to be with their company.

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...The most important thing for most people to know is that you must pay attention carefully as to when notice is required to be given to the umbrella carrier. Sometimes, when a claim comes in, people think it is a small claim (below the limit of the primary policy) and don't give notice to the umbrella carrier. Then, later - often much later - they realize the claim is a big claim that theoretically could exceed the limits of the primary policy so they give notice to the umbrella carrier. Then the carrier refuses to cover on the ground that notice is late. For that reason it is very, very, very important to always look at the notice requirements to make sure notice is given in the time and manner required....
Thank you for all of the information but especially for this bit of which I definitely was not aware.
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Old 02-02-2013, 05:54 PM   #45
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Thank you for all of the information but especially for this bit of which I definitely was not aware.
You're welcome. Obviously every state has different laws and various policies are different so always important to know what is required with your policy and the applicable state law.

One thing that bothers is that most people never actually read their insurance policies and often think (wrongly) that every homeowner's policy is like every other policy, for example. In reality there can be big differences among policies of the same type.
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Old 02-02-2013, 07:04 PM   #46
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Thank you for the personal experience. Do you mind sharing the name of the insurance company you use?
It's one of the big ones that has the letters F A R M in it. PM me if you want more info.

Glad I was able to plant a seed of doubt about the joys of investment real estate. It's not for the faint of heart.
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Old 02-02-2013, 09:48 PM   #47
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FWIW when I was pricing my umbrella (with the same carrier as my auto and home coverage) it was actually more expensive for me to to keep the auto and home coverages that I had at the time and get a bigger umbrella than it was to maximize my auto and home coverages and buy a smaller umbrella. My total coverage limit (umbrella and underlying) were the same but the pricing was different.
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Old 02-02-2013, 10:53 PM   #48
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Umbrella policies require you to have certain levels of coverage on your auto policy. My USAA umbrella policy requires me to carry $300K/$500k bodily injury and $100k property damage limits.
I just got my umbrella policy renewal from USLI/USAA with a 20% increase tacked on. Not a happy camper. I emailed them to see if they have another provider. I'm sure the problem is FL and not USLI but it was worth an email. Soooo much fraud in this state but there is no incentive to reduce it because there is no control on premiums.

I loved it when CA passed an insurance price control law in the late '80's, early '90's. It was the fraudsters worst nightmare because the insurance companies could no longer tack on huge increases to cover the increased fraud and there was huge motivation to clean things up.
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Old 02-03-2013, 12:45 AM   #49
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#1 umbrella policy
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I'm close. Umbrella policy plus lawyer sibling, in-laws, nieces and nephews whom I always remember with a small but meaningful gift on their birthdays, marriage anniversaries, and Christmas.

I've had the umbrella policy for close to 20 years. I think a lot has to do with what your activities involve. As was shown earlier it is a must if you own rental properties.

An addition thing to consider - keep silent about finances and don't let folks know what you have, don't flaunt any wealth, and make them think you're just getting by.
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Old 02-03-2013, 08:32 AM   #50
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An addition thing to consider - keep silent about finances and don't let folks know what you have, don't flaunt any wealth, and make them think you're just getting by.
+1. Exactly why I drive a 10 year old car and have far less house than we can afford.
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Old 02-03-2013, 08:41 AM   #51
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Will any of the "cloaking" matter once someone decides to sue or is it meant to make yourself less of an initial target for a suit which is about an issue for which you are not at fault?

I'm thinking if I have an "at fault" accident and someone decides to sue me, the first thing the opposing lawyer does is start digging into my policy limits and assets. In Florida, it seems the flow is sue first, ask questions later.
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Old 02-03-2013, 08:45 AM   #52
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I'm thinking if I have an "at fault" accident and someone decides to sue me, the first thing the opposing lawyer does is start digging into my policy limits and assets. In Florida, it seems the flow is sue first, ask questions later.
Is policy limit information available to someone suing you in FL? I don't think that's the case here in TX.
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Old 02-03-2013, 08:57 AM   #53
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#1 umbrella policy
#2 lawyer son

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I'm close. Umbrella policy plus lawyer sibling, in-laws, nieces and nephews whom I always remember with a small but meaningful gift on their birthdays, marriage anniversaries, and Christmas.
Close family friends of my folks, one daughter was an attorney. The dad bought a small house for her to live in while she studied, he let her stay in it after graduating. Always in his name, but she offered to handle the payments, taxes and such, so he just sent her the money. That was, until the foreclosure notice arrived. Seems she decided to keep the mortgage payments.

Many of the greatest financial risks we face are from family members, and an attorney in the family doesn't make one safer.
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Old 02-03-2013, 10:07 AM   #54
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I just got my umbrella policy renewal from USLI/USAA with a 20% increase tacked on. Not a happy camper. I emailed them to see if they have another provider. I'm sure the problem is FL and not USLI but it was worth an email. Soooo much fraud in this state but there is no incentive to reduce it because there is no control on premiums.

I loved it when CA passed an insurance price control law in the late '80's, early '90's. It was the fraudsters worst nightmare because the insurance companies could no longer tack on huge increases to cover the increased fraud and there was huge motivation to clean things up.
I didn't notice an increase in the umbrella policy (USLI/USAA in FL) renewal this year. Will have to go look now. USAA is not on my "must recommend" list anymore...ever since they would not transfer my homeowners policy to a new purchase in FL. It might be worthwhile to have our homeowners insurance co provide us a quote on everything else.
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Old 02-03-2013, 11:25 AM   #55
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...Glad I was able to plant a seed of doubt about the joys of investment real estate. It's not for the faint of heart.
That seed was planted long ago; you just watered and nurtured it a bit, which I definitely appreciate.

For me, owning investment real estate is similar to owning individual stocks, having a motorcycle, lots of good whisky, as well as a few other things I won't mention here: Seems like a good idea at first; almost guaranteed to end badly for me eventually.
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Old 02-04-2013, 10:19 AM   #56
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you just watered and nurtured it a bit, which I definitely appreciate.
And thank you for starting this discussion about umbrella policies. I'm on the phone with my agent now.
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Old 02-04-2013, 11:39 AM   #57
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I contacted my insurance company to get umbrella insurance but to my surprise Metlife does not offer it in MA. I get an employer discount with Metlife for autos and home. So far companies I contacted for an umberlla policy requires you to have your autos and home insured with them.

I guess I'll have to shop around for a new insurance policies.
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Old 02-04-2013, 12:18 PM   #58
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I contacted my insurance company to get umbrella insurance but to my surprise Metlife does not offer it in MA. I get an employer discount with Metlife for autos and home. So far companies I contacted for an umberlla policy requires you to have your autos and home insured with them.

I guess I'll have to shop around for a new insurance policies.
Check Quincy Mutual. IIRC, when I was in NJ they were willing to write my umbrella without writing home/auto.
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Old 02-04-2013, 01:44 PM   #59
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Umbrella policies are a good option, but as mentioned - you may be sued for more than your coverage and could be financially ruined. It might make you a better target for a lawyer - it's surprising how quickly and how much they can find out about you to determine if you are worth suing. Also mentioned is that some states protect some of your assets in various ways, but not all states. IIRC, your retirement assets are pretty much protected (OJ Simpson), but your taxable assets and personal property are fair game. Most people also title their property jointly (cars, homes, investments), so a car accident opens up everything of value you jointly own to being forfeited in a lawsuit. Remember, the guy's lawyer who is suing you works for a piece of the action, and the lawyer representing "you" works by the hour. The guy's lawyer suing you has to make a good determination if he can afford the upfront cost of going after you.

This topic has come up here in other threads and I have PM'd info regarding asset protection. I am not/was not in the legal field, but have been interested in this topic for some time. There are ways to protect assets that require legal assistance - home(s), income property, investments, etc. Considerations are Personal Residence Trusts (PRT) for your home(s), Limited Liability Companies (LLCs) for dangerous assets (investment properties), and Savings LLCs for unprotected taxable assets. This has side benefits of also protecting you in other ways (ie. medical bankruptcy, and Medicaid eligibility, although there is a 5 year look back with Medicaid).

I found this Lawyer on the internet [www.rjmintz.com] a long time ago - have never used him, but have passed around his site info for reference in these matters. He offers some interesting reading on these matters. Hope this helps.
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Old 02-04-2013, 06:28 PM   #60
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Is policy limit information available to someone suing you in FL? I don't think that's the case here in TX.
To be honest, I'm not sure. I was making an assumption that may not be correct.
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