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Umbrella insurance levels while ER ?
Old 02-18-2006, 04:21 PM   #1
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Umbrella insurance levels while ER ?

Hope this is right category for post.

Are umbrella policies strongly recommended while ER ? What levels ?

While in ER, portfolio is only "income generating" vehicle - seems important to protect it against lawsuits/judgements.

Any umbrella insurance companies recommended ? I've only found that companies will write umbrella policies if they have both your home/auto already.

Thanks for any thoughts !
Delawaredave
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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 04:39 PM   #2
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Re: Umbrella insurance levels while ER ?

Quote:
Originally Posted by Delawaredave
Hope this is* right category for post.

Are umbrella policies strongly recommended while ER ?* What levels ?

While in ER, portfolio is only "income generating" vehicle - seems important to protect it against lawsuits/judgements.

Any umbrella insurance companies recommended ?* I've only found that companies will write umbrella policies if they have both your home/auto already.

Thanks for any thoughts !
Delawaredave
We don't have one, although I've looked into it as I can see some
gaps in our coverage. Re. your statement that "companies will only
write umbrella policies if they have both your home/auto, etc"
I do not believe this is true.

JG
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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 04:42 PM   #3
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Re: Umbrella insurance levels while ER ?

D-dave, here is a prior thread on umbrella insurance:

http://early-retirement.org/forums/i...31610#msg31610

For the reasons you mentioned, I did get a $1M umbrella policy when I retired. Mine is from USAA, which already had my auto and homeowner insurance.

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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 05:19 PM   #4
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Re: Umbrella insurance levels while ER ?

I would regard it as foolish not to carry a substantial umbrella policy, esoecially once you are FIREd. Umbrella insurance is cheap; spend a few hundred bucks a year. $1MM is a minimum, IMO.
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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 06:49 PM   #5
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Re: Umbrella insurance levels while ER ?

Quote:
Originally Posted by MRGALT2U
I do not believe this is true.
Then you'd be pretty much wrong again

Umbrella policies are written by insurers, almost universally as an "umbrella" over existing home and auto policies. While one can get a separate liability only policy from the same or a separate insurer from their existing policies, you'd be an idiot to not take the far cheaper umbrella policy from your standing insurer.

The cost is low.

We're the sort of people that hucksters look for. Plenty of fairly liquid assets.

You should carry a minimum of a million, or whatever the average legal payout for the average liability claim in your area is...whichever is higher. Consider carrying an amount equal to your liquid net worth, including your home.

We have $2M in coverage. I'd have to go look for the exact number but it costs about $200 a year on top of about $200 extra a year total over our house and three cars as you have to carry a minimum liability on your home and cars thats higher than what most people carry.

I figure if I do something that a fair and impartial jury of my peers say is worth more than $2M and the insurance companies lawyer cant get that reduced, I deserve to open up the checkbook.
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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 07:02 PM   #6
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Re: Umbrella insurance levels while ER ?

I'll second CFB, right down to paying about $200/year for a $2M policy.

Quote:
Originally Posted by (Cute Fuzzy Bunny)
I figure if I do something that a fair and impartial jury of my peers say is worth more than $2M and the insurance companies lawyer cant get that reduced, I deserve to open up the checkbook.
I wonder if there's ever a case where they decide it's not going to go below $2M, and there's no point for them to negotiate down from, say, $5M to $2M, because their liability is maxed out anyway... that would hurt.

SC
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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 07:06 PM   #7
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Re: Umbrella insurance levels while ER ?

I have a $1 million dollar umbrella but will probably increase it to $2m.
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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 07:08 PM   #8
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Re: Umbrella insurance levels while ER ?

Quote:
Originally Posted by sc
I'll second CFB, right down to paying about $200/year for a $2M policy.

I wonder if there's ever a case where they decide it's not going to go below $2M, and there's no point for them to negotiate down from, say, $5M to $2M, because their liability is maxed out anyway... that would hurt.
They're going to try hard to not have the case go to court at all, and if it does, to have it thrown out or be below $2m. To the extent that they fail, either you had bad luck and got a bad judge and/or jury or you really screwed up.
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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 07:20 PM   #9
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Re: Umbrella insurance levels while ER ?

Quote:
Originally Posted by (Cute Fuzzy Bunny)
They're going to try hard to not have the case go to court at all, and if it does, to have it thrown out or be below $2m. To the extent that they fail, either you had bad luck and got a bad judge and/or jury or you really screwed up.
Now that you mention it, I recall at the time thinking that having the insurance company's lawyers on my side in such a case might be worth the premium all by itself.

Although, I've seen studies showing that in states where judges are elected, there's often a large bias towards the lawyer who gave more money to that judges campaign... maybe I should look at which insurance company is more generous with their donations?

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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 08:08 PM   #10
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Re: Umbrella insurance levels while ER ?

I've got one, and I know a fair number of others that do, but I've never heard of anyone that has had to cash in. Anybody got any first hand experiences to report?
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Re: Umbrella insurance levels while ER ?
Old 02-18-2006, 10:01 PM   #11
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Re: Umbrella insurance levels while ER ?

I have thought about getting an umbrella policy but do not have one. Mainly because I am a renter, and I do not have renter's insurance, and I think this would be required. I could replace my household items with one paycheck, so I don't see a need to insure them. There is some diminishing risk of fire damage, if I did something negligent, but I could write a check for that low probability event, too (my building is mostly concrete). But I am concerned about the big liability events.

As an apartment dweller, I have no yard, etc., and I am not self-employed, and so almost all my risk of being sued (95%+) for a big liability event is something happening while I am driving. I raised my auto liability limits to the max, $500K total but it is only $250K per person. I asked and I can't get them raised more.

Any renters with umbrella insurance? Do you also have renter's insurance? I would be willing to switch to an auto insurance company that had higher limits, if anyone knows of one. . . I looked at Geico and their max coverage was only $300K per accident. Ideally, I would like to have $2M of coverage.

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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 06:52 AM   #12
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Re: Umbrella insurance levels while ER ?

>Any renters with umbrella insurance? Do you also have renter's insurance? I would be willing to switch to an auto insurance company that had higher limits, if anyone knows of one. . .

We are renters, have renter's insurance, and an umbrella policy of $1M. Will up it to $2M on renewal. Underwriter is Chubb. Total cost for both policies here in NYC is $1000 per year.
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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 07:30 AM   #13
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Re: Umbrella insurance levels while ER ?

I am in Ohio and I pay $386 per year for a 1 million umbrella, I am required to have 300k auto and 300k liability before I could buy the umbrella.

They all are with the same company
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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 07:33 AM   #14
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Re: Umbrella insurance levels while ER ?

NYCguy,

Sounds like you need a good independent broker. Have martinis Network with some of your cosmopolitan contemporaries. Somone in your situation will likely have a recommendation.
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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 08:41 AM   #15
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Re: Umbrella insurance levels while ER ?

Quote:
Originally Posted by JPatrick
I've got one, and I know a fair number of others that do, but I've never heard of anyone that has had to cash in. Anybody got any first hand experiences to report?
My parents have been sued at least 3 times for a million or better stemming from auto accidents. Even though only one case resulted in a settlement for the paintiff (of about $50k), they were very glad to have a high limit umbrella policy.
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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 08:45 AM   #16
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Re: Umbrella insurance levels while ER ?

Brewer...what do you think caused the "paintiff"s (sorry, thats a fun mis-spell) going after them...transparency of funds? Did they get an investigator to find out if your parents had money?

What I'm getting at, aside from the umbrella, is there a strategy or method for hiding or improving transparency that you're "sue-able". Does putting the money in a trust, or some specific investment vehicle make it harder for an investigator to find?
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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 11:11 AM   #17
 
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Re: Umbrella insurance levels while ER ?

If someone knew you had an umbrella policy, would he/she be more or less likely to sue?
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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 11:14 AM   #18
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Re: Umbrella insurance levels while ER ?

When I moved from Maryland to Virginia my $1m umbrella policy went down from over $300 to $120 per year. It is with Allstate as are home and auto policies.

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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 11:30 AM   #19
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Re: Umbrella insurance levels while ER ?

Quote:
Originally Posted by TromboneAl
If someone knew you had an umbrella policy, would he/she be more or less likely to sue?
I'm thinking if they have a pretty good case, moreso. If its a skimpy ambulance chaser deal they're hoping for an out of court settlement on, maybe less so? On the other hand, an insurer might just pay out a small claim to avoid the hassle.

One of my ex's had an open house when she was selling her home. Young girl 'tripped over a crack' in her rear patio and fell, causing a requested 50k worth of injury and personal sufferage. Her insurance company paid 25k without batting an eye. Then her premiums went up 20%.
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Re: Umbrella insurance levels while ER ?
Old 02-19-2006, 11:40 AM   #20
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Re: Umbrella insurance levels while ER ?

A guy I work with hit a little girl with his car about 5 months ago. He had the max auto insurance but no umbrella policy. They reached a settlement out of court, but he had to get his own lawyers and take a new mortgage out on his paid off house.

I felt really bad for the guy, he doesn't make much money and has been trying to save for retirement.

I carry $1 million but I'd like to up it to $2 million. The insurance company seemed to think $2 million was too high of coverage. They would only cover me for 1/2 million for the first three years. Once they saw I didn't have any outstanding legal battles they allowed me to up it to $1 million. I'm with MetLife.

-helen
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