Umbrella Insurance

[rk911]

I am curious how many folks on here have umbrella insurance, and how much you carry in relation to net worth.

Do you up the coverage over the years as your NW grows?

We do have an umbrella thst covers ~70% of our NW. We look at this every few years.

 

[Sunset]

There is another recent thread about this. I carry a $1 million umbrella policy for $104 per year through State Farm. But the true cost is higher because they require you have higher liability limits on you other policies. It would take quite a bit of work to quantify that but I think it would be a total cost of about $350 per year.

The general idea is you need to think about your risks not just your assets.

...

Years ago, with State Farm, my Umbrella insurance lowered my cost for Auto insurance, as I was carrying a lot more than the minimum for IL of $25K/$50K. So the true cost was lower.

IL minimum auto ins. limits seem far too low.

 

[RE2Boys]

I started an umbrella policy back in 2006 for #1M. My sons were dragging me into activities that increased my liability exposure and I thought it prudent to protect the family assets. Such as coaching youth travel soccer and Scouting where I often had several boys in the car as we travelled to activities. Ten years later was the new driver risks. I have considered dropping the policy but the price has come down conssiderably once the younger son moved out. Now down to about $170 a year, it was once as high as $500+

 

[Aerides]

Curious - why doesn't it have to cover your net worth?

The calculation many of us have made is: Does it is cover enough that the insurance company will have a good lawyer show up?

 

[street]

We have umbrella coverage and covers about 15% of NW. It doesn't seem like much coverage, but I also believe you can overextend with umbrella insurance.

We pay about $2.01¢ a day for coverage.

 

[Fermion]

I started an umbrella policy back in 2006 for #1M. My sons were dragging me into activities that increased my liability exposure and I thought it prudent to protect the family assets. Such as coaching youth travel soccer and Scouting where I often had several boys in the car as we travelled to activities. Ten years later was the new driver risks. I have considered dropping the policy but the price has come down conssiderably once the younger son moved out. Now down to about $170 a year, it was once as high as $500+

I feel like we are the only ones paying a high rate.

No kids, no accidents and we are paying over $550 a year for a 1 million dollar policy.

 

[MichaelB]

I feel like we are the only ones paying a high rate.

No kids, no accidents and we are paying over $550 a year for a 1 million dollar policy.

It is a bit high. Do you have a pool, a dog, a business, a teenager living at home?

 

[Fermion]

It is a bit high. Do you have a pool, a dog, a business, a teenager living at home?

No pool, no dog, no kids at all, no business. We do own the 34 foot sailboat and maybe that is part of the high cost. I wonder if there is a way to exclude that from the policy as we never take anybody out on it nor does it really go fast enough to kill someone like a jet ski or powerboat can.

 

[ncbill]

The calculation many of us have made is: Does it is cover enough that the insurance company will have a good lawyer show up?

Needs to be enough to encourage the plaintiff to settle.

Remember, they're hiring an attorney working on contingency who wants to settle so they can take their cut & move on to the next case.

We didn't have umbrella coverage until the kids started driving, but probably will keep it forever now.

After all, it might well be me or spouse who is at fault.

No one means to be, of course, but that is why they call them accidents.

I'll probably increase umbrella coverage from $2 to $3 million...inflation, y'know.

 

[Retch The Grate]

Carrying $2M these days, costs aboute $360 a year at the moment, it is about 90% of our NW last time I checked, but I picked the amount because it was what they would write over the phone rather than requiring additional paperwork and it seemed sufficient to get us a good lawyer from the insurance company in the unlikely case we need it.

 

[Stormy Kromer]

There is another recent thread about this. I carry a $1 million umbrella policy for $104 per year through State Farm. But the true cost is higher because they require you have higher liability limits on you other policies. It would take quite a bit of work to quantify that but I think it would be a total cost of about $350 per year.

The general idea is you need to think about your risks not just your assets.

If your assets are $100 million but your likely liability is $500,000 you probably do not need umbrella insurance. If you worth is $1M you could be wiped out by a serious car accident that is your fault.

The point is, your net worth may have nothing to do with it. Talk to someone knowledgable, preferably a lawyer rather than an insurance agent!

Lawyers absolutely love Umbrella Policies (1/3 of a potential settlement...) They're more likely going to recommend one than an Insurance Agent.

 

[fh2000]

I have no boat, no dog, no pool, no more kids at home. I drive a 17 year old SUV. House is modest in Southern California standard. My 2M policy is $592 this year. It seems high. This covers my 50% of unproected asset. I am not sure if I need to increase since the premium is getting higher each year. Maybe it is due to the location?

 

[street]

We have umbrella coverage and covers about 15% of NW. It doesn't seem like much coverage, but I also believe you can overextend with umbrella insurance.

We pay about $2.01¢ a day for coverage.

Corrections on the cost. It should be .49¢ a day is what it costs us.

 

[Car-Guy]

Dropped mine this year. Price jumped up to ~$400yr and I didn't like some of the updated language on coverage/exclusions. It only covered ~20% of my NW anyway.

Matter of fact, in the last few years I've dropped other types of insurance coverage too. The cost was getting to high for the limited coverage. I just felt I'd be better off self insuring... And on my auto policies I have high deductibles to keep the cost down.

Medicare (Base Medical)
Medicare Advantage (Drugs +)
[-]Vision
Dental[/-]
Auto Insurance
[-]Umbrella Covergae[/-]
Home Insurance (w/replacement cost)
[-]Life Insurance[/-]

 

[imnontrad]

I have had a policy for the past few years. I read once that there was really no need to get more than 1 million because the insurance company lawyers will be working very hard to ensure that even that amount is not paid out.

 

[Car-Guy]

I have had a policy for the past few years. I read once that there was really no need to get more than 1 million because the insurance company lawyers will be working very hard to ensure that even that amount is not paid out.

I've heard that too but now that I have a family lawyer under an annual retainer I'm not sure I need another for such a remote likelihood.

I'm getting very tired of paying all these insurance premiums.

 

[Stormy Kromer]

If you were hurt beyond belief and had to contact an attorney to pursue the person who hurt you....how much liability limits would you want them to have? I'll bet most folks here would say "They better have enough to cover my loss!"

You should too.

 

[COcheesehead]

Umbrella insurance is relatively cheap, less than home owners, less then auto, maybe even less than trip insurance. Why would you want to skimp on something with so much universal coverage. Read a policy and see how much you actually get covered. It’s cheap insurance.

 

[meleana]

We carry our net worth.

 

[Fermion]

If you were hurt beyond belief and had to contact an attorney to pursue the person who hurt you....how much liability limits would you want them to have? I'll bet most folks here would say "They better have enough to cover my loss!"

You should too.

The odds are high they won't have much if any insurance. It seems the most responsible people are the ones least likely to cause an accident too. I know personally I always tarp and secure my loads, never drink and drive, always make sure my tires are properly inflated and have good tread.

It is probably a good reason that umbrella policies are so cheap...because the people who buy them are usually not the ones causing the accidents.

 

[COcheesehead]

The odds are high they won't have much if any insurance. It seems the most responsible people are the ones least likely to cause an accident too. I know personally I always tarp and secure my loads, never drink and drive, always make sure my tires are properly inflated and have good tread.

It is probably a good reason that umbrella policies are so cheap...because the people who buy them are usually not the ones causing the accidents.

Umbrella policies cover many perils beyond auto accidents.

 

[Sunset]

I've heard that too but now that I have a family lawyer under an annual retainer I'm not sure I need another for such a remote likelihood.

I'm getting very tired of paying all these insurance premiums.

How much is an annual retainer for a family lawyer ?

 

[KarenF]

I got Umbrella Insurance when I was serving on non-profit boards. We also had it when the kids started driving. Now that we are retired, we still have it - $1,000,000 each occurrence and $2,000,000 during the current policy period - it is very inexpensive, so we plan to keep it.

 

[Poopycat]

This thread is very timely for me because I have a reminder on my calendar to increase my umbrella policy, but now I’m wondering if I should actually do that.

I have a $2M umbrella policy and I pay $278/year for it. That covers less than half my NW, which is why I was considering increasing the policy to $3M. But I hadn’t given much thought to assets that might be protected from lawsuits. Some of you mentioned the homestead exemption, and I also wonder whether assets that are in a trust are protected (I believe assets in a trust are protected from bankruptcy, but I’m sure there are all sorts of rules and regulations that would allow people to go after those assets as well).

Anyway, I guess I’ll do a little more thinking before I bump up the coverage.

 

[Sunset]

This thread is very timely for me because I have a reminder on my calendar to increase my umbrella policy, but now I’m wondering if I should actually do that.

I have a $2M umbrella policy and I pay $278/year for it. That covers less than half my NW, which is why I was considering increasing the policy to $3M. But I hadn’t given much thought to assets that might be protected from lawsuits. Some of you mentioned the homestead exemption, and I also wonder whether assets that are in a trust are protected (I believe assets in a trust are protected from bankruptcy, but I’m sure there are all sorts of rules and regulations that would allow people to go after those assets as well).

Anyway, I guess I’ll do a little more thinking before I bump up the coverage.

assets in 401K and to varying degrees in an IRA are also protected.