How Many Here Have Umbrella Liability Coverage?

[haha]

Peace of mind for a few hundred a year. It's a no brainer.

This is how I see it also. Which would I rather have, some attorneys who really want to win on retainer, or 1 1/2 to two medium quality meals for GF and me?

Ha

 

[USGrant1962]

When I had umbrella liability from State Farm, they said up to $2M was automatically available, and for any additional coverage the underwriters would need to interview me and a different questionnaire was needed. I changed insurers a few years back and currently I can get up to $5M, but the price after $2M jumps considerably.

I got the same from State Farm a few weeks ago. Up to $2M is automatic, but over that it goes to underwriters. The underage drivers drive the rates.

 

[MooreBonds]

Back in 2015 I researched liability judgement and jury awards in our county in a high cost of living state. Out of a total of 150 cases, the average award was 750K (inflated due to a 33M award against a gangster for wrongful death and few 5-7M medical malpractice awards). The median award was only 15K. So for most people the probability of getting hit with a judgement in the millions of dollars is very small and if these were not rare the insurance companies would have jacked up their premiums considerably. That's why a 2M policy cost $300 to $400 but for that price why not have it for a peace of mind.

But you are looking at legal judgments and jury awards - you aren't looking at the countless cases that undoubtedly were settled out of court. So we have no idea how those were settled. And remember that many insurance companies don't care about the guilt or innocence - they only look at the potential legal expenses coupled with their chance of prevailing in court. Oftentimes they will offer a token settlement even if you are 100% innocent.

It also depends on which state/jurisdiction you are in. I believe that many states differ in what is allowed to be sued for (pain and suffering, lost wages, future lost wages, punitive damages, etc.). So a $25k judgement in one city/state could easily be magnitudes more in another if certain items are included.

 

[DrRoy]

Are assets protected if they are in a living trust?

 

[gauss]

Are assets protected if they are in a living trust?

If it is a revocable trust, as nearly all Living Trusts are, then absolutely not.

-gauss

 

[Dtail]

If it is a revocable trust, as nearly all Living Trusts are, then absolutely not.

-gauss

Wouldn't the 2 main categories of protection be TIRA/401K and Irrevocable Trusts?

 

[gamboolman]

Too much GD Dirty Bird tonight...

But AD&D is not always a bad thing....

But we do have Umbrella policy for $5M and need to revisit next trip into Texas.

Our son was T-boned by a no insurance SOB that ran a red light .... all on video...

Had to sue our own Insurance company to pay our Uninsured Policy.

Point being the GD MF that permanently injured our son had jack shiite to get....sue him and get nothing. SOB walked away a free man after permanently injuring a young man.

if you have any amount of money or assets... IMHO you are a GD fool if you do not have a Umbrella policy because God forbid you are involved in something or a accident..... these MF's will come after you...The truth and justice have jack shiite to do with it.

Umbrella policy makes me feel good about going to sleep at night

Lifes A Dance And You Learn As You Go

gamboolman....

As to my deleted post.... AD&D insurance is a good deal for folks who work in not so nice places...

As to Accidental Death & Dismemberment

I have it. Oversea's in the Delta of Nigeria

I fly domestic airlines in Africa, a lot, - arguably the most dangerous thing I've ever done in 40+ year in the oilfield.

Lot of kidnappings, targeted threats to Managers, killing everyday....never makes the MSM news in the states as does not fit the agenda....if only folks in USA knew what they don't know...

For ~$30 bucks a month Ms. gamboolgal gets ~$2.6M and thats on top of lots of other insurance...

Hay, if I'm wearing a seat belt she gets a extra $25K....

Not saying anything but Ms. gamboolgal watches Crime TV about Black Widows getting rid of the 'old man' on the African Brit TV alot....just saying....

Is ADD a good deal?

No probably not, but it makes me feel good when I'm getting on a domestic airline out of Lagos to the Delta....

Lifes A Dance And You Learn As You Go

gamboolman....

 

[JoeWras]

Once or twice I posted here after tipping back a few. Now I know how it comes across.

 

[mtpisgah]

We have it mainly because we have a pool. While there is a fence all around it and it is built to code, two of the four gates are not locked. Even it they were, it is still easy for a kid to get in and drown.

 

[mtpisgah]

Yes, for all assets, $10M.
I was an architect, and although my designs were well engineered, you can't be too careful

I would hope the corporate insurance should protect you, unless you were a sole proprietor. I am an engineer and here in SC my company would defend me in a case unless I was purposefully negligent.

 

[explanade]

If it is a revocable trust, as nearly all Living Trusts are, then absolutely not.

-gauss

So how do you cover assets in a revocable or irrevocable trust?

Name the trust as an insured?

 

[SojoMojo]

I’ve had a $1M Personal Liability Umbrella Policy (PLUP) for 25+ years with State Farm. The yearly premium was around $100 when I first got it. It’s now $256.

Since I’m single with no dependents, I’ve often considered dropping it, but one of the endorsements that keeps me hanging on to it is the Underinsured Motor Vehicle Coverage. If I’m badly injured by an uninsured or underinsured motorist and my automobile UIM limits of $100K are insufficient to compensate me; my $1M Personal Liability Umbrella Policy will kick in.

The incident that really got me interested in getting a PLUP was Bill Clinton and the Whitewater scandal. Bill Clinton had a State Farm PLUP and State Farm paid all his legal defense expenses (which were considerable given all the high-priced defense attorneys hired). A lot of conservatives went bonkers against State Farm for paying his legal defense expenses, but State Farm said that they were legally obligated to do so. Whether or not any civil judgment would be covered by Clinton’s PLUP was a separate issue than could not be decided under a verdict was made. I read somewhere that Clinton’s legal defense expenses were in far excess of his PLUP limits, but legal defense expenses are separate from the PLUP limits.

If you only have homeowners or automobile liability $100K and it looks like there’s a good chance that those limits would be paid, an insurance company is more likely to pay those limits and wash their hands of the claim against you. If you’ve got a $1M+ PLUP, the insurance company is more likely to put up a more vigorous defense on your behalf.

As with any insurance, not having a PLUP is a roll-of-the-dice (Do you feel lucky?). If you're at-fault and total out a Lamborghini or a Maserati and badly injure the brain surgeon doctor who was driving, will your auto insurance limits cover the loss? If you have a $1M PLUP, that still might not be sufficient to cover the damages, but it's better than the basic limits.

 

[AutoMc]

I have had a $1M umbrella policy for several years. It looks as if many on this forum have at least $2M. I may think about increasing my coverage since my net worth has increased substantially since I retired.

 

[Lisa99]

Yes, we have one as well. Equals our net worth.

 

[Dtail]

So how do you cover assets in a revocable or irrevocable trust?

Name the trust as an insured?

For an irrevocable trust, you are basically giving up all ownership of the assets in the trust and the trustee(s) decide how to distribute the funds. Thus there is a big trust factor.
The tax rates hit the maximum rates at much lower levels in the trust, so it is not an easy decision.
Folks sometimes use an irrevocable trust for protection of assets from LTC costs (Medicaid planning).

 

[timo2]

I have umbrella ins, for $2 million. I originally had it when I was a surveyor out and about, but now I realize so many people have zero money and so many lawyers want their business, I need something. My NW isn't that much after the pension and SS and house are taken out.

 

[MarieIG]

Too much GD Dirty Bird tonight...

I have it. Oversea's in the Delta of Nigeria

I fly domestic airlines in Africa, a lot, - arguably the most dangerous thing I've ever done in 40+ year in the oilfield.

Lot of kidnappings, targeted threats to Managers, killing everyday....never makes the MSM news in the states as does not fit the agenda....if only folks in USA knew what they don't know...

.

This is bringing stress at work to a new level. Stay safe so you and Mrs. G have a nice long, happy retirement together.

 

[gauss]

Wouldn't the 2 main categories of protection be TIRA/401K and Irrevocable Trusts?

That is my understanding.

Irrevocable Trusts can possibly be used for asset protection, but not Revocable Trusts.

Be careful, however, in that TIRA protection varies on a state by state level.

-gauss

 

[sengsational]

How does one check to see if their US state prevents judgements against 401k and IRA assets?

 

[gauss]

How does one check to see if their US state prevents judgements against 401k and IRA assets?

Here is a non-authoritative chart that summarizes IRA protections in all 50 states. Note that it also cites the specific State statute the summary is based upon. You would be well advised to track down the current version of the actual statute to ensure that it is still in effect (ie the chart appears dated 2014)

https://www.thetaxadviser.com/content/dam/tta/issues/2014/jan/stateirachart.pdf

My understanding is that ERISA governed employer retirement plans (ie most if not all "qualifed" 401ks) have federal protection in all 50 states. My particular state also enshrines this protection in state law, so I did not track down the Federal statute.

Note also that there may be differences in law between "bankruptcy exempt asset" protection and protection from creditors attaching assets. I am not an attorney.

Probably best to talk to an attorney in your state to verify your understanding of this.

-gauss

 

[gauss]

An interesting question regarding State protection of IRAs might be: Which State's laws have jurisdiction in these matters?

1. The resident state of the defendant?
2. The resident State of the plaintiff?
3. The State where the event occurred?
4. The State where the assets are located (ie Pennsylvania for Vanguard)?

My gut feeling is that the answer is [1] but I have nothing to back this up.

Perhaps its time to shop for an Umbrella policy!

 

[Cpadave]

We have a $2M policy for $386 a year. It is one of those thing one hopes they never need to use it. We also don't drive too much.

 

[Cpadave]

$5mm - $435/yr

That is a great price for that much coverage.

 

[FreeBear]

We've got. Costs about $225 per million of coverage yearly. Well worth peace of mind. I think anyone with assets or a half way decent j*b should have at least a million in coverage. Times we live in...

 

[MJ]

I don't have it. Someone correct me if my understanding is wrong but I read somewhere that in a lawsuit your insurance will use your auto/home insurance limits first, anything beyond that is then covered under the umbrella policy ($1M umbrella would include the auto/home limits so it's only providing $600k of coverage if your auto/home covers $400k, if I recall). Since all my big assets are already protected from lawsuits i.e. primary residence, 401k, IRA the only exposure would be to my savings and investment accounts. These accounts are while sizable now, one, they still fall within the auto/home policy coverage limits and two if I'm sued for a bigger amount than that it still won't make or break me.
Even with the umbrella you could be sued for a higher amount than your policy covers so you can keep doing the what-ifs indefinitely.

I called my insurance agent regarding this issue. The umbrella policy is an add-on to your existing auto and/or home. If your auto has $400K liability and you were sued for an auto incident, you'd be covered for $1.4 M. If your home has $200K liability and you were sued for a non-auto incident, you'd be covered for $1.2M.