How Many Here Have Umbrella Liability Coverage?

[gauss]

Quote:

Originally Posted by NoiseBoy Some time back, a Facebook friend put up a lengthy post advocating for having an umbrella policy. Her husband was struck by a car on private property and badly injured. Since he was not in his car, his auto policy did not apply. Since it was an accident and not an illness, his health insurance didn't provide coverage. The teenage driver had insurance, but it had a low medical payout. Because it was private property the driver wasn't even issued a citation. They survived mainly because he was in a union and they continued to pay him a disability wage even though it wasn't technically required in this particular circumstance. I may not have all of the details exactly correct as she posted this over a year ago.

I am skeptical of this as described. Around here, my understanding is that the injured husband would access the hospital etc with his medical insurance card.

The hospital and/or his medical insurance company would ask a whole lot of questions on how the injury occurred. If an insured driver contributed to the accident, then the medical insurance company's subrogation unit would directly pursue reimbursement from the responsible auto insurance company.

Disclaimer - I do live in an auto "no-fault" state, so this may work differently elsewhere.

Quote:

Originally Posted by audreyh1 Excuse me? What do you mean health insurance doesn’t cover accidents?!?!

Perhaps the medical insurance of the husband was one of those hollow policies that have since been banned by the ACA.

-gauss

[Dash man]

The only way I could see health insurance not covering an accident is if it’s work related, and workers compensation would cover it.

[SumDay]

Quote:

Originally Posted by Kwirk Other than peace of mind, have you benefited from having umbrella insurance?

Yes, I had an anti-government kook, representing himself (not a lawyer) who tried to steal a house from me. The State Farm lawyers were bulldogs and in spite of the fact he filed thousands of pages of gobbeldy-gook nonsensical motions, it was dismissed with prejudice. I could write a book...

[TuborgP]

Yes 2 million in Umbrella

[NoiseBoy]

Quote:

Originally Posted by audreyh1 Excuse me? What do you mean health insurance doesn’t cover accidents?!?!

Which is why I included a closing disclaimer that I may not have all of the details correct. I just recall that, as she described it, the situation was one where they thought they had all of the insurance that you needed, but discovered that they were not as covered as they thought. Maybe it was as simple as the problem of subtracting one spouse's income for an extended period of time from a family of four living in a Chicago suburb? I mainly recall that her story was heartfelt and left an impression on me that there were probably gaps in my own insurance, although possibly only for very rare situations.

Thanks for the clarification on the meaning of liability umbrella insurance and the need to get a rider for my friend's situation.

[RAMingione]

Many folks use NW as a guide to amount of umbrella coverage, but NW has only indirect bearing on how much a claimant might seek should one suffer a liability event (although their lawyers will certainly try to judge how much they might successfully obtain in a settlement based on your NW). Rather think of your umbrella coverage as a "moat". How high do you want to build your moat before any settlement attacks your assets? You can have coverage equal to NW, but nothing limits size of a claim other than what a lawyer thinks might potentially be awarded.

[medved]

I am late to this discussion but I am interested because I am considering increasing my umbrella coverage. I can get a good group rate -- about $700/year for $5mm; just under $1300/year for $10mm. But I am not sure how to analyze how much to buy. Some people say "enough to cover your assets" or "enough to cover your non-exempt assets (those assets reachable by a tort creditor)."

But I am not sure that analysis makes sense because -- no matter what coverage amount you have -- a tort creditor can always look to that amount, plus an additional amount up to the total amount of reachable assets you have. So it seems to me the better analysis might be "how much would it take to resolve pretty much any tort claim you could reasonably anticipate." But that is really hard to say.

So, I don't know what to do...

[Cpadave]

Quote:

Originally Posted by medved I am late to this discussion but I am interested because I am considering increasing my umbrella coverage. I can get a good group rate -- about $700/year for $5mm; just under $1300/year for $10mm. But I am not sure how to analyze how much to buy. Some people say "enough to cover your assets" or "enough to cover your non-exempt assets (those assets reachable by a tort creditor)." But I am not sure that analysis makes sense because -- no matter what coverage amount you have -- a tort creditor can always look to that amount, plus an additional amount up to the total amount of reachable assets you have. So it seems to me the better analysis might be "how much would it take to resolve pretty much any tort claim you could reasonably anticipate." But that is really hard to say. So, I don't know what to do...

I would say if you are a high risk person. Like a practicing doctor or drive a lot, you should get a proper asset protection planning. Most assets will be in somewhat protected entity. Otherwise, just buy enough coverage that will force the insurance company to hire top attorneys for the case. Maybe 2-3Mil.

[stephenson]

Hi All,

Great thread!

We have four rental houses in Florida, a couple of cars, a power boat and a personal home.

We have quotes of $500ish for $1M, $750ish for $2m and $1K for $3M.

OR, should we get two policies? One to cover personal home, vehicles and boat, and another to cover the four rental houses?

Three companies - USLI, RLI and Hudson - AM Best says USLI is the best and Hudson the least good. Thoughts?

Oh yeah, and not wxxrking.

Thanks!

[Cpadave]

Quote:

Originally Posted by stephenson Hi All, Great thread! We have four rental houses in Florida, a couple of cars, a power boat and a personal home. We have quotes of $500ish for $1M, $750ish for $2m and $1K for $3M. OR, should we get two policies? One to cover personal home, vehicles and boat, and another to cover the four rental houses? Three companies - USLI, RLI and Hudson - AM Best says USLI is the best and Hudson the least good. Thoughts? Oh yeah, and not wxxrking. Thanks!

Is the rental house held in a LLC or separate entity? Rental property can be considered high risk asset. Something happens to tenant or another person and they will sue the landlord. We had a rental house many years ago. Got sued by tenant and mail person. I think putting that asset in a separate entity with separate Lib insurance might be a good idea.

[4legsgood]

Quote:

Originally Posted by sengsational ... One thing not mentioned in the article was retirement assets and primary residence being protected. ...

In my state (WA), primary residence is just protected to $125k.

I do have an umbrella policy, purchased when I bought lake front property. Also, I have large trees on properties, and a large dog . I think about increasing my policy, currently $1 million, and I also think about getting a SPIA, for more protection.

[stephenson]

Houses are not in an LLC or corporate structure of any kind.

There has been a lot of discussion about using either an LLC approach OR an umbrella - some noted that the legal system does not protect via the LLC in many cases, but that insurance companies have lots of attorneys and most claimants see this as a bigger deterrent.

My two options are:
1. One umbrella for personal stuff and rental houses
2. Two umbrellas - one for personal stuff and one for rental houses

[COcheesehead]

Quote:

Originally Posted by stephenson Houses are not in an LLC or corporate structure of any kind. There has been a lot of discussion about using either an LLC approach OR an umbrella - some noted that the legal system does not protect via the LLC in many cases, but that insurance companies have lots of attorneys and most claimants see this as a bigger deterrent. My two options are: 1. One umbrella for personal stuff and rental houses 2. Two umbrellas - one for personal stuff and one for rental houses

I would put the rentals in each of their own LLC’s. It limits your risk to just that individual property. Hence the term Limited Liability Company. Otherwise I think your entire empire is at risk. I own a commercial property. I wouldn’t think of just covering it with an umbrella.

[stephenson]

COcheesehead,

Yes, I understand the LLC advantages - however, even on e-r.org, there are two camps wrt LLCs and umbrellas ...

I think I am going to do the umbrella now and then reconsider the LLCs ...

[Nick12]

Quote:

Originally Posted by Dtail Anyone else from FLA have an umbrella policy? I am paying 600 yearly for 3 of us for 2M coverage with no one under 55 y.o. I was told in general that FLA has the highest state rates due to many not having car insurance. I use Liberty Mutual and their Renters/Car insurance was the lowest of the major players in FLA.

Looking to get umbrella insurance thru nearby insurance agent. Quoted $450 for $1M. Need to get other quotes. You are right. With a huge number of uninsured motorists in Florida roads may add to the higher rates. And with no annual state car inspection here in Florida, there could be a number of cars on the roads with faulty brakes, suspension, emission and steering issues.

[robnplunder]

I have one to insure against the crazies + lawyers chasing after easy money.

[Sunset]

Quote:

Originally Posted by stephenson Hi All, Great thread! We have four rental houses in Florida, a couple of cars, a power boat and a personal home. We have quotes of $500ish for $1M, $750ish for $2m and $1K for $3M. OR, should we get two policies? One to cover personal home, vehicles and boat, and another to cover the four rental houses? Three companies - USLI, RLI and Hudson - AM Best says USLI is the best and Hudson the least good. Thoughts? Oh yeah, and not wxxrking. Thanks!

I thought in FL your personal home was exempt from lawsuits.

[Sunset]

Quote:

Originally Posted by medved I am late to this discussion but I am interested because I am considering increasing my umbrella coverage. I can get a good group rate -- about $700/year for $5mm; just under $1300/year for $10mm. But I am not sure how to analyze how much to buy. Some people say "enough to cover your assets" or "enough to cover your non-exempt assets (those assets reachable by a tort creditor)." But I am not sure that analysis makes sense because -- no matter what coverage amount you have -- a tort creditor can always look to that amount, plus an additional amount up to the total amount of reachable assets you have. So it seems to me the better analysis might be "how much would it take to resolve pretty much any tort claim you could reasonably anticipate." But that is really hard to say. So, I don't know what to do...

To me, it's a no-brainer at those rates to get the $5M coverage, so the only question would be is it worth it to spring the extra $600 for an extra $5M coverage ?

Another possibility if you have huge reachable assets, would be to split them off from yourself inside numerous LLC's, I have read a person can set up LLC's that are very discouraging to lawsuits.

I wish I could get $5M coverage for $700, that is to me a very good deal

[medved]

Quote:

Originally Posted by Sunset To me, it's a no-brainer at those rates to get the $5M coverage, so the only question would be is it worth it to spring the extra $600 for an extra $5M coverage ? Another possibility if you have huge reachable assets, would be to split them off from yourself inside numerous LLC's, I have read a person can set up LLC's that are very discouraging to lawsuits. I wish I could get $5M coverage for $700, that is to me a very good deal

Yes the $5mm is clearly worthwhile and I have that. I’m just questioning whether I should increase to $10mm. The LLC approach seems cumbersome and a tort claimant could potentially pierce the veil or execute on the LLC membership interests.

[USGrant1962]

Quote:

Originally Posted by medved Yes the $5mm is clearly worthwhile and I have that. I’m just questioning whether I should increase to $10mm. The LLC approach seems cumbersome and a tort claimant could potentially pierce the veil or execute on the LLC membership interests.

I've been studying this and it seems there is a real debate over whether a single-member LLC provides any significant protections. If you have a real multi-member LLC it seems that the protections are real for each member. For a single member LLC it is not so clear and it may be easier to pierce the veil.