How Many Here Have Umbrella Liability Coverage?

[4legsgood]

...

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]

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]

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]

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]

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]

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]

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.

 

[VungTau]

No insurance of any kind, I'd be dead before a lawsuit came to trial in my country!

Same here. Living in Asia there is a small chance of a lawsuit, it's just a totally different society. Plus I don't drive and have no properties so I can't see much of a risk.

 

[6miths]

Same here. Living in Asia there is a small chance of a lawsuit, it's just a totally different society. Plus I don't drive and have no properties so I can't see much of a risk.

Same here. Canada.

 

[gerntz]

Yes, at about 2/3 of NW. And I hope I never benefit from it. That would be awful.

 

[Andre1969]

I wanted to get an umbrella policy years ago, but ran into a complication. My Dad had bought a car, and put my name on the title, thinking it would make it easier to transfer to me when he passed away. I remember that being a sticking point...the insurance company was worried that, because my name was on Dad's car, it could theoretically get me into some trouble if he did something lawsuit-worthy with that car.


At first, they said they could just put it into the policy that they wouldn't cover anything resulting from that, but then, they simply refused. Well, Dad has passed away now. But, only problem is, I did it again. In 2012, I bought a new truck, and my uncle let me use his old one as a trade in. So, I put his name on the title, so he'd have my new truck if I died, with a minimum of fuss. At the time, Dad was still alive, so I wasn't thinking about umbrella policies.

 

[Islandtraveler]

I think I'm getting hosed. I pay $1,132 a year for 2 Mil. Wait until I see that greedy gecko.

 

[Dtail]

I think I'm getting hosed. I pay $1,132 a year for 2 Mil. Wait until I see that greedy gecko.

Are you covering teenagers?
That is the highest I have heard for 2mm coverage though.

 

[Sunset]

I wanted to get an umbrella policy years ago, but ran into a complication. My Dad had bought a car, and put my name on the title, thinking it would make it easier to transfer to me when he passed away. I remember that being a sticking point...the insurance company was worried that, because my name was on Dad's car, it could theoretically get me into some trouble if he did something lawsuit-worthy with that car.


At first, they said they could just put it into the policy that they wouldn't cover anything resulting from that, but then, they simply refused. Well, Dad has passed away now. But, only problem is, I did it again. In 2012, I bought a new truck, and my uncle let me use his old one as a trade in. So, I put his name on the title, so he'd have my new truck if I died, with a minimum of fuss. At the time, Dad was still alive, so I wasn't thinking about umbrella policies.

From the previous reasoning of Dad having car in your name.
This (Bold) won't stop Umbrella, because if you get into an accident, he will be sued, not you.

 

[Andre1969]

From the previous reasoning of Dad having car in your name.
This (Bold) won't stop Umbrella, because if you get into an accident, he will be sued, not you.

but, if my Dad got into an accident that made for a big enough lawsuit, won't they possibly come after me as well, since I'm an owner of the vehicle? As in, if my Dad's insurance didn't wasn't enough to cover it, wouldn't they try to go "where the money is"?



As for my truck, that I put my uncle's name on, he does drive it every once in awhile. So the insurance company might still look at that as too much of a risk. I guess I could revisit them, and find out.

 

[ncbill]

Teenage drivers & way too many vehicles all push up my umbrella rate.

Owning rental home(s) can have an even bigger impact than the above.

I'll probably soon move the kids onto their own auto policies.

 

[Islandtraveler]

Are you covering teenagers?
That is the highest I have heard for 2mm coverage though.

I have one 23 year old boy. He has had only one moving violation since he started driving. I think I will look into a separate policy for him. Saved a bundle on Health Insurance that way too.

 

[gwraigty]

From the previous reasoning of Dad having car in your name.
This (Bold) won't stop Umbrella, because if you get into an accident, he will be sued, not you.

This might depend on state law. See below...

but, if my Dad got into an accident that made for a big enough lawsuit, won't they possibly come after me as well, since I'm an owner of the vehicle? As in, if my Dad's insurance didn't wasn't enough to cover it, wouldn't they try to go "where the money is"?

Disclaimer: IANAL and state law on this may vary.

Possibly. In my state, there is something called owner's liability. The biggest risk is a single owner on the car title who lends their car to someone else, even between spouses. Both the driver and the owner of the car can be sued, even if the owner wasn't present in the car.

Example: a car is titled to only one spouse. The other spouse drives the car and gets into an at-fault accident. The spouse driver is sued and the spouse owner is sued for giving their spouse permission to drive the car. Joint assets are 100% at risk as well as individually owned assets, excluding exempt assets, of course.

The risk is somewhat mitigated when the car is jointly titled and the car is only driven by the joint owners, also because of state law. There is no owner's liability involved between joint owners, as both have permission to drive the car. In my state, joint owners are considered to own 50% of the property.

Example: a car is jointly titled to both spouses. One spouse gets into an at-fault accident. The spouse driver is sued. The other spouse can't be successfully sued as s/he couldn't deny or grant permission for the driving spouse to drive the car. Both have equal rights to drive the car. Only 50% of assets may be at risk in a lawsuit, because per my state law, each jointly owned account/property is considered 50% owned among 2 joint owners. The 50% deemed to belong to the non-driving joint owner is off-limits.

YMMV. If a state doesn't impose owner's liability in car accidents, it's a moot point. If a state considers joint owners to all own 100% of the assets, then it all could be up for grabs in a lawsuit.

It pays to know who you should own property/accounts with and why.

 

[Sunset]

^^^^ interesting, any chance there is a website that lists the States ?

 

[gwraigty]

^^^^ interesting, any chance there is a website that lists the States ?

I researched my state law directly, so I don't know.