|
|
Liability Insurance Question
05-17-2019, 12:24 PM
|
#1
|
Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,871
|
Liability Insurance Question
Do you have it and is there a rule of thumb how much is enough ?
For example, 68 year old retiree, no debt, net worth in the one-two million arena, plays golf, no DUIs or anything remarkable in the background.
Reason I ask, was playing golf yesterday and a person in the foursome pulled a tee shot onto a busy freeway, fortunately no broken glass or accidents but it got me wondering. Would this be a good time for a person to have liability insurance and if so, how much would cover any damages or lawsuits ?
Thanks in advance for any and all responses.
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
05-17-2019, 12:45 PM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,201
|
You likely have liability insurance if you own a home or a car. Are you thinking of umbrella insurance? Umprella sits over your home and auto insurance and covers a wide variety of potential perils above and beyond home and auto coverage.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
05-17-2019, 12:56 PM
|
#3
|
Thinks s/he gets paid by the post
Join Date: Dec 2017
Posts: 2,523
|
You can always be sued for more than you're worth. But some assets are typically excluded from being attached, such as 401(k)s. I'd look that up for your state, to determine how much you might need. Likely, you wouldn't need to cover the entire $2M.
I'm sure the golf course's insurance company would be involved, had the errant ball caused an injury!
__________________
Balance in everything.
|
|
|
05-17-2019, 01:08 PM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,862
|
The rule of thumb I have seen is to have liability insurance equal to net worth. I think that rule of thumb is dumb. As HNL Bill points out, the size of the lawsuit is not constrained by your net worth.
I think a better rule of thumb is to find out what the typical or largest award in your state is for a standard negligence lawsuit and then insure for that amount via an umbrella policy. In my state that is $1M. If you were a high profile person or did particularly risky-for-others things, I would consider more.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
|
|
|
05-17-2019, 01:27 PM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
|
Quote:
Originally Posted by SecondCor521
The rule of thumb I have seen is to have liability insurance equal to net worth. I think that rule of thumb is dumb. As HNL Bill points out, the size of the lawsuit is not constrained by your net worth.
I think a better rule of thumb is to find out what the typical or largest award in your state is for a standard negligence lawsuit and then insure for that amount via an umbrella policy. In my state that is $1M. If you were a high profile person or did particularly risky-for-others things, I would consider more.
|
But punitive awards in some states can go to a cap of 3X the original award, so be sure to check those limits as well.
|
|
|
05-17-2019, 02:00 PM
|
#6
|
Recycles dryer sheets
Join Date: Oct 2008
Posts: 131
|
Quote:
Originally Posted by COcheesehead
But punitive awards in some states can go to a cap of 3X the original award, so be sure to check those limits as well.
|
It might be a good idea to check if your insurance even covers statutory and/or punitive damages. Your state might not permit it.
BR
|
|
|
05-17-2019, 04:40 PM
|
#7
|
Recycles dryer sheets
Join Date: Mar 2019
Posts: 96
|
Perfect timing... I just changed home insurance and added an umbrella policy today... with two male teens I chose about 2/3 of net worth so I could survive anything... was wondering if that was too much, but it’s only a few hundred $ more per year
|
|
|
05-17-2019, 06:00 PM
|
#8
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 16,972
|
Quote:
Originally Posted by SecondCor521
The rule of thumb I have seen is to have liability insurance equal to net worth. I think that rule of thumb is dumb. As HNL Bill points out, the size of the lawsuit is not constrained by your net worth.
I think a better rule of thumb is to find out what the typical or largest award in your state is for a standard negligence lawsuit and then insure for that amount via an umbrella policy. In my state that is $1M. If you were a high profile person or did particularly risky-for-others things, I would consider more.
|
+1
I get $2M as it's only a little more than $1M and will ensure the insurance company fights harder.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
|
|
|
05-17-2019, 07:03 PM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
|
Lots. What you are really buying is the enthused defense your insurer will afford you. I picked 2mm because I figured that amount would have them bring in a lawyer that was really a pit bull in people clothing.
|
|
|
05-17-2019, 07:04 PM
|
#10
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,201
|
+1 my insurer has 2 million reasons to give me a vigorus defense.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
05-17-2019, 07:22 PM
|
#11
|
Dryer sheet aficionado
Join Date: Oct 2017
Location: Texas
Posts: 48
|
If you have assets you want to keep then liability and property insurance + a healthy amount of umbrella insurance is one of the best hedges you can execute. But it is worth reading the fine print. As others note higher limits are not that expensive and are there for not only fortuitous but also unlikely events.
|
|
|
05-18-2019, 06:06 AM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2006
Location: Washington, DC
Posts: 11,314
|
All this talk of liability and umbrella makes me wonder what I am actually insured against. I have home, auto, and umbrella policies. I am guessing that the umbrella supplements only claims that are already covered under the auto and home policies. So, for example, if I went back to work and was sued by an employee (personal tort) I would have no coverage. I am guessing if I was sued for a personal injury by someone I ran into while riding my bike I would have no coverage.
Is there such a thing as a general liability policy that covers oddball situations that don't fall under other policies?
__________________
Idleness is fatal only to the mediocre -- Albert Camus
|
|
|
05-18-2019, 06:13 AM
|
#13
|
Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,157
|
Quote:
Originally Posted by frayne
a person in the foursome pulled a tee shot onto a busy freeway, fortunately no broken glass or accidents but it got me wondering. Would this be a good time for a person to have liability insurance and if so, how much would cover any damages or lawsuits ?
|
Wouldn't golf lessons be cheaper?
__________________
I thought growing old would take longer.
|
|
|
05-18-2019, 06:16 AM
|
#14
|
Full time employment: Posting here.
Join Date: Oct 2017
Posts: 717
|
Quote:
Originally Posted by braumeister
Wouldn't golf lessons be cheaper?
|
LOL!
__________________
Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in private and public life have been the consequence of action without thought... - Bernard Baruch
|
|
|
05-18-2019, 06:51 AM
|
#15
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
|
Quote:
Originally Posted by donheff
All this talk of liability and umbrella makes me wonder what I am actually insured against. I have home, auto, and umbrella policies. I am guessing that the umbrella supplements only claims that are already covered under the auto and home policies. So, for example, if I went back to work and was sued by an employee (personal tort) I would have no coverage. I am guessing if I was sued for a personal injury by someone I ran into while riding my bike I would have no coverage.
Is there such a thing as a general liability policy that covers oddball situations that don't fall under other policies?
|
The only time that I am personally aware of a claim against an umbrella happened to of all people my insurance agent. She struck a pedestrian crossing the street and the person’s lawyer won a settlement against the umbrella after initially having challenges against the auto policy.
The interesting part is my agent can no longer obtain umbrella coverage for some length of time in the future. I can’t recall the time limit.
|
|
|
05-18-2019, 07:44 AM
|
#16
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,201
|
Quote:
Originally Posted by donheff
All this talk of liability and umbrella makes me wonder what I am actually insured against. I have home, auto, and umbrella policies. I am guessing that the umbrella supplements only claims that are already covered under the auto and home policies. So, for example, if I went back to work and was sued by an employee (personal tort) I would have no coverage. I am guessing if I was sued for a personal injury by someone I ran into while riding my bike I would have no coverage.
Is there such a thing as a general liability policy that covers oddball situations that don't fall under other policies?
|
Yes, an umbrella policy.
I'm pretty sure that your umbrella would cover your defense if you were sued by an employee... I know it covers libel, slander, etc. Same with your bike... because not only does the umbrella extend coverage under your base policies, it also covers a variety of other perils that your base policies don't cover.
https://www.allstate.com/tr/personal...liability.aspx
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
05-18-2019, 03:45 PM
|
#17
|
Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,610
|
Remember also, if your current auto/house policies are not maxed out on the liability coverage, you will probably need to do that before you can talk umbrella.
|
|
|
05-18-2019, 04:08 PM
|
#18
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,201
|
^^^ No, IME you don't need to max out your base coverages to have an umbrella... there are required minimums though.
I recall the first time I was buying an umbrella I was debating between $1 million and $2 million and I found it was cheaper to increase my base policy coverages and buy a $1 million umbrella than to leave my base policy coverages where they were and buy a $2 million umbrella.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
05-18-2019, 07:52 PM
|
#19
|
Thinks s/he gets paid by the post
Join Date: Apr 2016
Location: Ex-Cali
Posts: 1,231
|
Has nothing to do with net worth. Minimum should be $2m umbrella because that will cover most reasonable lawsuits. I have $3m because I worry. EVERYBODY should have an umbrella. It's too cheap not to. Even your college age kids with no money should have this so they don't have a lawsuit trail them for life.
__________________
______________________
The plan was September 1, 2022 and I am 95% there. Still working a few hours a week at the real job.
|
|
|
05-18-2019, 08:06 PM
|
#20
|
Full time employment: Posting here.
Join Date: May 2011
Posts: 873
|
+1 I have a $2 million umbrella. It is the cheapest insurance you can have to have peace of mind.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|