Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
speaking of liability protection
Old 02-19-2007, 07:42 PM   #1
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
speaking of liability protection

not sure if this is correct catagory but all the umbrella talk got me thinking about liability & protecting assets.

i've got an old friend coming down for what i thought was a few days but somehow got extended to two weeks. i originally told him (before knowing how long i'd have the pleasure of his company) that he wouldn't need a car, we could just double up on mine.

in the past i've had no problem with that as i didn't have much assets to attack. but does having this money now in my name prevent me from being so generous with my things? if he got in an accident, could my assets be attacked?
__________________

__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
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!

Re: speaking of liability protection
Old 02-19-2007, 07:50 PM   #2
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 678
Re: speaking of liability protection

I what state do you live?
__________________

__________________
JustCurious is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 07:51 PM   #3
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 678
Re: speaking of liability protection

and how much liability insurance do you have?
__________________
JustCurious is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 07:52 PM   #4
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 678
Re: speaking of liability protection

where are your assets? are they in qualified retirement accounts? Do you have any substantial assets not in a qualified retirement account?
__________________
JustCurious is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 08:09 PM   #5
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
Re: speaking of liability protection

i'm in florida. i don't have an umbrella policy yet. just shopping it now. $300k on the house & i think similar on the car. less than 1/3 of the cash in retirement accounts. house protected by homestead for now but i'm planning to downsize (in cost, not in actual size) within 5 years which would free up more assets to be attacked.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 08:16 PM   #6
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 678
Re: speaking of liability protection

Lazy, to my knowledge, Florida is the only state in the country where the answer would be "yes."

As far as getting an umbrella policy, where are the remaining 2/3 of your assets? How much money are we talking about.

In my opinion, most people simply don't need an umbrella policy. It is pushed by insurance companies because it is so rarely ever needed, and yet the collect premiums from so many people it is very profitable.

I should add that if you have 300k in liability protection, the chances of something happening where you would NOT have enough coverage is very very slim indeed.
__________________
JustCurious is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 08:21 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Apr 2006
Posts: 1,487
Re: speaking of liability protection

Quote:
most people simply don't need an umbrella policy
i'd seriously disagree ... it's cheap protection. while true that ever needing it might be a slim chance, it's one most cannot afford to take.
__________________
d is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 08:27 PM   #8
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 678
Re: speaking of liability protection

d, let me say that I can only speak for Florida, which is where I practice. But in my experience as a personal injury attorney for more than 11 years, I have only seen one case where a defendant had to pay money out of pocket over and above the policy limits. And I have seen and been involved with hundreds of cases.

Bear in mind that I usually only get involved AFTER a lawsuit is filed. There are many, many cases that are settled presuit. The point is that the number of cases where someone pays over and above the policy limits is so small that I deem it to be statistically insignificant.

Also bear in mind that in Florida, a person has many protections... homestead (unlimited), retirement accounts, jointly held marital accounts, all wages if you are head of household....

Insurance companies know this. Personal injury attorneys know this. This is why almost every single case that I have been involved with has settled or resolved for the policy limits, or less.

The only people out there pushing umbrella policies are the insurance companies who use scare tactics to scare people who are risk averse (like those on this board), and they cite to the worst case scenario which is technically possible, but EXTREMELY unlikely, to justify buying umbrella policies which are very very profitable because they have to pay benefits so rarely.

By the way, I know from first hand experience that having high liability coverage, or having an umbrella policy, makes it MORE likely that you will be sued because the high insurance policy makes you attractive to personal injury attorneys who know that they can only collect up to the amount of coverage.
__________________
JustCurious is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 08:30 PM   #9
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: speaking of liability protection

Lazy, though what JustCurious makes a lot of sense, I would still get the umbrella. It is not at all expensive. And yes, if your friend has an accident with your car you can be liable. The nature of your assets are such that some are not going to be exempt from creditors (specifically, the assets you are inheriting from you mother may not be exempt).

There is another thread going right now where the topic has also moved to asset protection:

http://early-retirement.org/forums/i...8066#msg228066

Florida is very generous in protecting its residents from creditors.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 09:27 PM   #10
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
Re: speaking of liability protection

thanx all. i was also reading the other threads which got me to think about my friend's visit (didn't want to hijack other thread). in the past i just would have given a visitor permission to use my car. now maybe i can't.

martha is right that i am concerned about the inherited money. but also the house seems should be a concern. because even though it is homesteaded and so protected for now, i'm planning to sell and only put 1/2 that back into another homesteaded property. or maybe even none if i decide to become a vagabond, which looks better & better the more i look at it. and that move would then put most all my assets at risk if i'm reading all this right.

i agree also that justcurious is probably right about attracting lawsuits and the unlikelihood of otherwise being held liable. good points. but i remember people thinking how "crazy" my mother was to "over insure." back then it was with a long-term health care policy.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 09:55 PM   #11
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Re: speaking of liability protection

When we say, "attract lawsuits" are we saying that lawyers have access to insurance company records, and have a phone book of umbrella policy holders they can just dip into for that next yacht? Or are we saying that if you make it known....

I got the $1 Mil policy because I felt it was worth the small premium to protect my assets from that very unlikely but possibly devestating occurence. I believe it's been said on this board before that the original idea of insurance is to protect against financial ruin, and you shouldn't look for an ROI from it.

Of note, I had to up some of my existing homeowners insurance to qualify for the umbrella, that raised an eyebrow, but it only added a couple of bucks so I let it slide...
__________________
laurence is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 10:00 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,446
Re: speaking of liability protection

Yeah, that's what I want to know. How can you "attract" lawsuits? How can someone know if you have an umbrella policy?

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 10:26 PM   #13
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 678
Re: speaking of liability protection

Quote:
Originally Posted by Laurence
When we say, "attract lawsuits" are we saying that lawyers have access to insurance company records.......
Laurence, I did not use the phrase "attract lawsuits." Here is what I said: "By the way, I know from first hand experience that having high liability coverage, or having an umbrella policy, makes it MORE likely that you will be sued because the high insurance policy makes you attractive to personal injury attorneys who know that they can only collect up to the amount of coverage."

Update: I stand corrected, I see you were quoting lazy.
__________________
JustCurious is offline   Reply With Quote
Re: speaking of liability protection
Old 02-19-2007, 11:33 PM   #14
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
Re: speaking of liability protection

sit or stand, yer still in the hot seat. what's the difference please between what you said

Quote:
Originally Posted by JustCurious
having an umbrella policy, makes it MORE likely that you will be sued because the high insurance policy makes you attractive to personal injury attorneys
and how i distilled that to "attracting lawsuits"?

or if i did not misunderstand what you were saying can you please address laurence's question. thanx.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Re: speaking of liability protection
Old 02-20-2007, 02:14 AM   #15
Full time employment: Posting here.
 
Join Date: Dec 2006
Posts: 509
Re: speaking of liability protection

Especially in such a litigious country... and considering I'm in CA where the car/property values are even higher, last thing I want is to worry about getting taken for several hundred thousands when I could have paid $10 a month for that protection.

Also, the umbrella gives me some flexibility with other things, such as when I start up a home based business and don't yet have corporate structures in place (i.e. not enough income that paying the $800 CA LLC fee makes sense).

Quote:
Originally Posted by d
i'd seriously disagree ... it's cheap protection. while true that ever needing it might be a slim chance, it's one most cannot afford to take.
__________________
Peaceful_Warrior is offline   Reply With Quote
Re: speaking of liability protection
Old 02-20-2007, 06:11 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,633
Re: speaking of liability protection

The insurance companies are pretty ruthless with their money. I can't believe they make it easy for plaintiffs' attorneys to find out who has umbrella policies so they can cherry pick their suits. On the other hand, it is probably quite easy for an ambulance chaser to find out that you have lots of personal assets so they can cherry pick people with money. Thus it would appear even more important to carry an umbrella policy for them.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Re: speaking of liability protection
Old 02-20-2007, 07:28 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Re: speaking of liability protection

I have heard that annunities and life insurance can be used to shield assets in some states. Can anyone confirm?


Also has anyone found a site that shows asset protection strategies state by state?
__________________
chinaco is offline   Reply With Quote
Re: speaking of liability protection
Old 02-20-2007, 07:46 AM   #18
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 149
Re: speaking of liability protection

In Minnesota I know the owner of the car is responsible for it if he gives anyone else permission to drive it. The owner is the one who gets sued.

I would be very cautious who I let drive my vehicles.

I don't know why anyone would question having an umbrella policy if you have the assets to protect. I would not count on ANY legislation protecting my assets, they may be protected under statute, but it may cost you a fortune in court costs to prove that point.

I think the most valuable part of any liability policy is the defense coverage that it provides in addition to the amount of liability coverage.

It's cheap peace of mind and as far as I'm concerned it's the best buy in the insurance industry.
__________________
"Watch your topknot"
Empty Pockets is offline   Reply With Quote
Re: speaking of liability protection
Old 02-20-2007, 11:38 AM   #19
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Re: speaking of liability protection

Quote:
Originally Posted by lazygood4nothinbum
sit or stand, yer still in the hot seat. what's the difference please between what you said

and how i distilled that to "attracting lawsuits"?

or if i did not misunderstand what you were saying can you please address laurence's question. thanx.
Ditto, I'm trying to see where the hook is in your statement, JustCurious. Are we saying that once the accident happens, the attorney files for discovery (or whatever the right term is) and finds out about the policy? At what point do you become more attractive?
__________________
laurence is offline   Reply With Quote
Re: speaking of liability protection
Old 02-20-2007, 11:47 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Re: speaking of liability protection

I pay $226 a YEAR for $2 million coverage........to me, that's cheap coverage.

Not that I am an accident waiting to happen, but you know if that Girl Scout selling cookies slips on a little patch of ice on my sidewalk, and breaks her leg, I'm getting sued.......
__________________

__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Asset protection / Trusts JJac FIRE and Money 3 04-19-2007 12:59 PM
Personal Umbrella versus Personal Excess Liability policies ? Linney FIRE and Money 25 11-28-2006 08:06 PM
Supplemental Spousal Liability Insurance Jeb-NY FIRE and Money 0 11-27-2006 11:39 AM
Creditor Protection 401K/Rollover IRA/etc. kaneohe FIRE and Money 6 03-17-2006 08:48 AM
Buying Years of Service as Asset Protection Mountain_Mike FIRE and Money 8 11-26-2005 12:20 PM

 

 
All times are GMT -6. The time now is 10:16 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.