Curious about umbrella liability policy experience

[H2ODude]

I've carried an umbrella liability for many years. I've looked at past threads and assume most who've accumulated substantial assets do as well. Anyone care to relate how it protected them in an unfortunate incident? I'm not considering abonadoning it by any means, just curious. Figured if anyone doesn't have it such stories might motivate them to learn more and get it.

I'd guess the most frequent use would be vehicle accident that involves serious long term disability. Then again, I have two Basset hounds, doubt they seriously disfigure anyone .

[ziggy29]

I have it (and I think quite a few others of us do as well), but I have no experience with using it. But one of the main advantages, above and beyond the liability coverage itself, is that when the insurance company is potentially on the hook for a million dollars or more, you can bet they will mount their strongest legal defense with their best lawyers... and your premiums already pay for that as well.

And it may be obvious to many, but it's worth repeating anyway -- if you are potentially liable for something, NEVER make it known that you have an umbrella or the sharks will smell blood in the water knowing there's a chance you're good for $1 million or more.

[easysurfer]

I have no experience using it. But I think the cost is cheap for the amount of coverage and peace of mind as a just in case.

Price does vary with insurance companies. Right now I pay about $150 annually (or looked at monthly, only $12.50 a month) for a million dolllars of coverage. Previously, before I switched insurance carries the amount was about double.

[RunningBum]

Quote:

Originally Posted by ziggy29 I have it (and I think quite a few others of us do as well), but I have no experience with using it. But one of the main advantages, above and beyond the liability coverage itself, is that when the insurance company is potentially on the hook for a million dollars or more, you can bet they will mount their strongest legal defense with their best lawyers... and your premiums already pay for that as well. And it may be obvious to many, but it's worth repeating anyway -- if you are potentially liable for something, NEVER make it known that you have an umbrella or the sharks will smell blood in the water knowing there's a chance you're good for $1 million or more.

+1 to all the above.

[braumeister]

I look at the umbrella coverage simply as additional peace of mind, and count it cheap for that.

[FANOFJESUS]

Quote:

Originally Posted by ziggy29 I have it (and I think quite a few others of us do as well), but I have no experience with using it. But one of the main advantages, above and beyond the liability coverage itself, is that when the insurance company is potentially on the hook for a million dollars or more, you can bet they will mount their strongest legal defense with their best lawyers... and your premiums already pay for that as well. And it may be obvious to many, but it's worth repeating anyway -- if you are potentially liable for something, NEVER make it known that you have an umbrella or the sharks will smell blood in the water knowing there's a chance you're good for $1 million or more.

Can an attorney look up how much insurance you have?

[tryan]

Wish I had a umbrella policy ... nobody will touch you if you have 6 or more rental properties. So I put liability coverage on each property separately .

[2B]

I had a threat of a lawsuit from a lawyer of a woman that claimed my daughter injured her with her/my car. She alleged she was crossing the street. Her lawyer said that based on the "extensive injuries" his client sustained that he would be seeking compensation for her physical damages, mental anguish and loss of income. There was no damage to my car.

My daughter did not think she hit her but she had my daughter's license plate and her description. I turned it over to my insurance company. I can't say for sure if it was started because of my auto insurance with them or the umbrella policy. Their investigion started the same day. It turned out that the woman had filed at least 10 injury claims with 10 different lawyers. Four of the claims were with my insurance company. The investigation only lasted for two weeks and the lawyer never contacted me again.

Just to make this even funnier, the woman had recently been released from prison. Her crime? Insurance fraud. I never heard if she was prosecuted.

I'm still glad I just had to make a phone call and this got majically cleaned up.

[ziggy29]

Quote:

Originally Posted by tryan Wish I had a umbrella policy ... nobody will touch you if you have 6 or more rental properties. So I put liability coverage on each property separately .

Are they each in their own individual LLC? That can provide at least *some* extra protection depending on state law.

[East Texas]

I'm assuming you and others on this thread know and understand the basics of an Umbrella policy so I won't address those fundamentals.


There are two primary reasons to carry insurance (we'll get to the Umbrella in a moment):

• Hard economic times promotes / encourages a highly litigious society.
• You cannot pick the dynamics of an accident - fault, property damages, injuries.

There has been a long standing thought process that monies from an insurance settlement are "free money". Injuries in an accident that may have been considered minor five years ago are suddenly major with pain and suffering. People are more prone to sue when money is tight.

If you're involved in an accident for which you're legally and financial responsible, you want to shift that financial responsibility to your insurance company as much as possible. Let your insurance company provide you legal assistance. Let your insurance company work out all the settlement issues. This only works if you carry high enough limits on your insurance policies. You want that veil of protection between you and financial disaster.

One thing I hate to hear is "you can't take blood out of a turnip" as a reason for people to carry only the minimum coverages required by their state laws. This attitude is the "sue me and you won't get squat" because they feel since they're carrying the minimum limits they're absolved of any responsibility. The prevailing attitude is "if you hit me I'll sue you for everything you've got" and "if I hit you, too bad".

As I mentioned earlier, you cannot choose the dynamics of an accident. You are limited on the coverage maximums you can have on your car and homeowner's policies. While the states mandate minimum liability insurance, the insurance companies control how high you can go on the underlying policies. You may have high enough coverages on your auto policy for the majority of accidents; however, what about the catastrophic accident where several people were killed or maimed and the 18 wheeler carrying high value electronics overturned and you were at fault?

Remember that "veil of protection" I wrote about earlier? It goes both ways. You want your insurance company to protect you and your financial future in case you were at fault. That only happens if you have the right coverages and high enough limits on your auto policy. That's why you need an Umbrella policy. It is coverage above your auto and homeowner policies.

An Umbrella also protects you. If the other party is at fault and you have catastrophic injuries above your medical payments and Personal Injury Protection (we're leaving medical health insurance out of this because not everyone has it), your Umbrella policy also provides you with a "veil of protection". It really is a two-way street.

In Texas, one out of every five vehicles is uninsured. A large portion of the remaining "insured" vehicles only carry the minimum coverage limits required by the state. I'll put my trust in USAA to handle all pieces of an accident, regardless of fault.

I've taken a circuitious route to answer your question because I wanted to give some basis behind my answer. The reason you want to have an Umbrella policy is simple. To protect your financial security. The cost is reasonable. The Umbrella also provides a few extra coverages not available under the auto or homeowner's policies.

[jazz4cash]

Not meaning to hijack, but as a general consideration would like to know from those who have umbrella coverage, is it standalone or is it provided by your homeowner's and/or auto insurer?

Reason for asking is that I am transitioning away from Geico, starting with auto, working on homeowner's and next step will be umbrella coverage which I do not currently have.

[Texas Proud]

Just curious.... but any examples of companies and costs

[pb4uski]

Timely topic for me in that I just got a quote for umbrella coverage today. The same carrier who has my home/auto coverage quoted me $445 for a $2m umbrella, plus $275 for umbrella under/uninsured motorist coverage; total $773.

I had previously signed up for umbrella through a professional association for a bit less, but when I got the policy it excluded both my watercraft so I dropped them like a hot potato.

I'm still trying to get my head around the under/uninsured motorist umbrella coverage and where it might apply. Do you have have UM/UIM umbrella coverage? What risks that you are concerned about would it cover?

[East Texas]

Quote:

Originally Posted by Texas Proud Just curious.... but any examples of companies and costs

USAA Texas $1mil $127. We live a rural area and that probably has some influence on the premium. I'm sure this takes into account longevity with the company, number of products, claims record, etc. Unfortunately, you can't do an Umbrella quote online so you'll have to call. If you're a member, you know the number. If you're not a member, check with the company who has your auto insurance.

Quote:

Originally Posted by pb4uski I'm still trying to get my head around the under/uninsured motorist umbrella coverage and where it might apply. <snip> What risks that you are concerned about would it cover?

If you're involved in an accident, and the other person is at fault, AND your MedPay, PIP, UM/UIM/UMPD is not enough to cover your injuries and/or property damage, your Umbrella policy kicks in. If you don't have UM/UIM/UMPD then there's no coverage under the Umbrella.

Quote:

Originally Posted by pb4uski Do you have have UM/UIM umbrella coverage?

If you have UM/UIM on your auto policy, and it's the minimum required for the Umbrella Policy - then you automatically have the coverage under your Umbrella.

********

I have a.....suggestion.... for those USAA members in Texas (not sure about the other states). Logon to USAA and see how much $1mil would cost you in Bodily Injury coverage and Uninsured Motorist coverage on your auto policy. Knowing there are lots of rating factors, you might be pleasantly surprised that increasing your BI to $1mil simply doesn't cost that much. Then you can sit your $1mil Umbrella on top of it and you have....$2mil coverage.

Liability is really cheap, folks. Wouldn't you rather pay a couple of hundred dollars every year for an Umbrella policy and/or increased auto liability limits than spend decades paying off a judgment?

[pb4uski]

Quote:

Originally Posted by East Texas ....If you have UM/UIM on your auto policy, and it's the minimum required for the Umbrella Policy - then you automatically have the coverage under your Umbrella.....

In my state you can decline the UM/UIM umbrella. That is why it is separately quoted.

[East Texas]

Quote:

Originally Posted by pb4uski Timely topic for me in that I just got a quote for umbrella coverage today. The same carrier who has my home/auto coverage quoted me $445 for a $2m umbrella, plus $275 for umbrella under/uninsured motorist coverage; total $773.

I'm re-reading this... your current insurance company is charging you $275 in addition to the $445? It must be something with the boat policy. I think you need to sit down in front of him/her, pull out a piece of paper, and have him/her draw you a picture how all this goes together.

$773? Ouch.

[pb4uski]

Quote:

Originally Posted by East Texas I'm re-reading this... your current insurance company is charging you $275 in addition to the $445? It must be something with the boat policy. I think you need to sit down in front of him/her, pull out a piece of paper, and have him/her draw you a picture how all this goes together. $773? Ouch.

Yeah. I think I will take on your suggestion to see if it is cheaper to increase my home/auto coverages and then make commensurate adjustments to the umbrella coverage. Might just work.

[Grainiac]

State Farm MN: 2M $389

[Bluwtrguy]

Is there some guidance or rule of thumb on the amount of insurance to purchase? is it something close to net worth?

[Animorph]

My umbrella cost more than doubled when my kids started driving. On top of the normal increase in car insurance you would expect. So it does depend on your particular liability exposure. Probably tough to compare.