At what point would you drop umbrella policy?

[COcheesehead]

How many times have you been sued for $1million? How many people do you know who have been sued for $1million. And of those, why did they get sued? A dog bite? A slip and fall? Running with scissors in their hands? A burn from the family campfire? A propane tank exploding right in front of them. I knew one person whose dog bit a neighbors friend. He just paid all the dr bills and called it good.

Naive

 

[Telly]

People … it’s cheap vs what you’d have to pay in court. Don’t be penny wise and pound foolish.

Yup! When I started the early-ER experiment over 20 years ago, I looked for things that could knock me out and send me back to a life of in the yoke pulling the plow. The umbrella, and having the ins. co. provide lawyers and strategy to protect their investment solved that.
Over the last 10 years our umbrella premium has changed only a few dollars total. <$300 for $2M with SF. We have house/vehicles/umbrella with same co. A sharp person in the ins. office long ago pointed out that we could minimize our total ins. premium $ by boosting our vehicle liability amounts to a certain level. By doing that, the umbrella premiums declined much greater than the addition to the vehicles.

 

[big-papa]

As long as we own cars and as long as there are lawyers, no way am I ever going to drop my umbrella policy. No.Way.
Like others, our premium is higher than we'd like but that's because our 21 year old daughter is covered as part of this. She'll eventually launch and our premiums will drop accordingly.

Cheers

 

[audreyh1]

If I no longer owned property or vehicles to insure and no longer drove I would certainly reduce it.

 

[Dash man]

Having a sizable taxable account (unprotected) and four houses besides our primary home, I would never drop my umbrella policy. But if I were at fault for injuring someone seriously in a car accident, I’d want them to be cared for. An umbrella policy would help with that. It’s not always just about money.

 

[JoeWras]

Good friend had a judgement against him for $1m due to an at fault accident of his daughter. A fatality was involved. Umbrella took care of it.

Teenage drivers are a huge risk. The accident was a result of situational inexperience.

 

[Fermion]

I guess it is cheap lawyer insurance. In the dog dying in the sun case, I would not want the umbrella to pay one cent to the doggy day care...I'd rather file bankruptcy and have them get nothing than see someone get $$ for killing my pet.

 

[Jerry1]

Not for $110. That is a meal for 2 right now.

Or .6 of 1 tire for your car. Keep the Umbrella. Ella. Ella.

Who could disagree with Rihanna?

I usually don’t like covers but I do like the Rihanna version as well as the Train version.

Either way, I’m in the same camp - the cost is too low not to have it. I can only hope it’s insurance I never have to utilize.

ETA: Need to correct myself. I looked it up and did not realize that Rihanna did Umbrella first. Learn something every day.

 

[CRLLS]

I know someone who bumped a pedestrian with their car in a cross walk and was sued. The umbrella covered it.

People … it’s cheap vs what you’d have to pay in court. Don’t be penny wise and pound foolish.

Different Times for sure. in the mid '70s, I was driving through a residential area after a big snowstorm, being very careful and driving very slowly. A young boy ran out into the street in front of me. He came out of nowhere, from behind a large mound of snow piled up at the end of a driveway. There was no way I was going to avoid him. I managed to slow some and I did hit him. Fortunately, he was apparently not injured. I drove him 3 or 4 blocks to his home and delivered him to his mother explaining what had just happened. She reamed the boy out in the front doorway for being so careless and then closed the door. I never heard from them again.

I had another story where we hosted a yard party. Our dog, who was not a vicious animal, was chained up by his doghouse. Kids were playing with him throughout the day. We announced to everyone that the dog was being fed and to leave him alone while he ate. One little boy decided to enter the doghouse while the dog was eating. The dog didn't care for that and gave the boy a little snap in the face. We offered to take the boy to the dr's to have it taken care of, or to pay for any bills related. Mom and Dad said no way. The boy was told to stay away. It wasn't our fault, it was their boys own fault.

Today, I am certain that there would be a lawsuit in both cases. I carry umbrella insurance. You never know what might happen or who is litigious.

 

[OddGuy]

Echoing the spirit of responses here, I don't see umbrella insurance as a straight mathematical financial question, I see it as an expense to have "muscle" on tap should it be needed.

If you were in the position to sue someone, would you want to sue just them, or would your attitude change if you knew an insurance company would be fighting against you?

 

[OldShooter]

... If you were in the position to sue someone, would you want to sue just them, or would your attitude change if you knew an insurance company would be fighting against you?

In our state the trial lawyers have arranged for a mandatory wallet check, The first thing the plaintiff's attorney does is to obtain disclosure of what insurance exists and its limits.

 

[Fermion]

Part of what I am hearing here is that a umbrella policy makes it more likely you will get sued.

 

[athena53]

Part of what I am hearing here is that a umbrella policy makes it more likely you will get sued.

No, I'd say that having assets that can be liquidated to pay for a lawsuit makes it more likely you'll get sued. If I have $3 million in investments and only minimum Auto/Homeowners limits, the plaintiff will find an attorney to take the case- they just want a "deep pocket", regardless of whether it's me or my insurance company. If, in addition, I have $3 million in umbrella coverage, I have an insurer's high-powered legal team that will fight it because they don't want to be on the hook for $3 million. Sure, they MIGHT return a verdict for $6 million and clean me out but my guess is that most would take the $3 million plus underlying limits and go away happy. After all, they're only taking money from a faceless insurance company and not a 70-year old widow.

 

[ivinsfan]

Part of what I am hearing here is that a umbrella policy makes it more likely you will get sued.

That's the double edged sword

 

[ivinsfan]

athena53..I'm not sure I agree it takes a ton of legal fees to get to the point of finding out your assets..for low profile people like us they usually don't bother they just want insurance money....living low profile helps

 

[ncbill]

In a case like this, I doubt a settlement would be signed. 10X was awarded and only 1X was delivered (for example). Why would they sign off as "settled." More likely, there would be ongoing collection attempts, liens, etc. If there is something to eventually go after, wouldn't the lawyers or collection agency keep sniffing around for years?

Maybe one of our lawyer members will chime in.

Again, that's why the defendant (who lost) would file bankruptcy ASAP in order to discharge any excess judgment left after losing their unprotected assets.

Even if they're retired with no wage income future unprotected assets (e.g. an inheritance in a taxable brokerage account) remain at risk until that creditor judgement is discharged via bankruptcy, assuming they were not DUI in the case of an auto accident.

 

[OldShooter]

Part of what I am hearing here is that a umbrella policy makes it more likely you will get sued.

Not sure why. How would a potential plaintiff know whether you have an umbrella or not? They'd have to file first to find out.

... Sure, they MIGHT return a verdict for $6 million and clean me out but my guess is that most would take the $3 million plus underlying limits and go away happy. After all, they're only taking money from a faceless insurance company and not a 70-year old widow.

Quite a few years ago I had a conversation with the head underwriter at Avemco, an aviation insurance company. He said exactly the same thing. In his years in the business he had never seen a jury go beyond the policy limits. He said they seem to think that the insurance company is fair game but the individual is not.

 

[RetMD21]

I'm paying less than $700 for 5 million in umbrella insurance but I think we are considered very low risk. I think I might look like someone who could pay a large judgment so it seems prudent to have the insurance.

There are Youtube videos about making assets less visible with the idea that you are less likely to be a target but I am not sure how well it would work and it sounds like it could cost a lot.

 

[youbet]

Having a sizable taxable account (unprotected) and four houses besides our primary home, I would never drop my umbrella policy. But if I were at fault for injuring someone seriously in a car accident, I’d want them to be cared for. An umbrella policy would help with that. It’s not always just about money.

Sadly, many folks don't think as you do. That's why I carry a ton of uninsured and underinsured coverage.

 

[ivinsfan]

I'm paying less than $700 for 5 million in umbrella insurance but I think we are considered very low risk. I think I might look like someone who could pay a large judgment so it seems prudent to have the insurance.

There are Youtube videos about making assets less visible with the idea that you are less likely to be a target but I am not sure how well it would work and it sounds like it could cost a lot.

This is going to be a personal decision for people in the grey area. for example we own a business with close family members. We not only own it but work it together. We've always assumed anything that happens to the other family members could be an issue for us as well. All of us individually own farmland, which can be discovered with a few keystrokes...



And yes we carry a large enough umbrella to make people go away and leave us alone. Another key is we all insure together with a company that knows our history and what we need. Are they the absolute cheapest, we don't know but we do we are cross covered the way we need to be covered.

 

[youbet]

Again, that's why the defendant (who lost) would file bankruptcy ASAP in order to discharge any excess judgment left after losing their unprotected assets.

Even if they're retired with no wage income future unprotected assets (e.g. an inheritance in a taxable brokerage account) remain at risk until that creditor judgement is discharged via bankruptcy, assuming they were not DUI in the case of an auto accident.

Interesting and I didn't know that. The injured party does not have to sign a settlement agreement to end collection attempts. The defendant just has to file and obtain Chapt 7 bankruptcy protection for his protected assets. The bankruptcy judge officially ends collection attempts even if the injured does not sign a settlement.

It's easy to imagine lots of hypothetical examples where that process would seem to be unfair to the injured, but lots of our laws are that way I guess.

 

[athena53]

Sadly, many folks don't think as you do. That's why I carry a ton of uninsured and underinsured coverage.

I know. When I was in the business that was cheap coverage. Not anymore because there are so many people driving around with minimum limits (which don't get updated for decades because it's politically unpopular) or no insurance at all.

 

[Dtail]

Have 2m in Umbrella and would not think currently of getting rid of it. Reduces one of the few possibilities of getting lots of assets wiped out.

 

[Fermion]

I guess I have always played the odds, which is why I never buy a lottery ticket. Technically I should take the money that would be spent on an umbrella policy and instead use it to buy a portable defib that I carry in a backpack, as my family history makes it about 100x or more likely I will have a heart attack and die than get sued.

But I will probably just shop around for a cheaper umbrella policy and not buy the defib unit.

 

[dmpi]

I had a 1M umbrella policy for 10 years and then I got rid of it five years ago. It started at $250 and then over the years rose to around $500. I decided I'm done with it. However I kept the high limits (300K?) on my existing auto and home policy. Even without a umbrella there are things you can do to limit your liability. If possible make an effort to structure your assets to limit your assets that can be seized by judgements. For example a 401K is better than a IRA. Try to limit your risks by removing hazards. Examples include aggressive dogs, swimming pools, tripping/slipping hazards, driving like a maniac, hiring unlicensed/uninsured handymen. Document your property, install cameras around your home and dash cams in you auto. It's all just common sense.