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Old 07-11-2018, 08:46 AM   #121
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An interesting question regarding State protection of IRAs might be: Which State's laws have jurisdiction in these matters?
  1. The resident state of the defendant?
  2. The resident State of the plaintiff?
  3. The State where the event occurred?
  4. The State where the assets are located (ie Pennsylvania for Vanguard)?

My gut feeling is that the answer is [1] but I have nothing to back this up.

Perhaps its time to shop for an Umbrella policy!
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Old 07-11-2018, 01:12 PM   #122
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We have a $2M policy for $386 a year. It is one of those thing one hopes they never need to use it. We also don't drive too much.
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Old 07-11-2018, 01:14 PM   #123
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$5mm - $435/yr
That is a great price for that much coverage.
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Old 07-11-2018, 02:56 PM   #124
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We've got. Costs about $225 per million of coverage yearly. Well worth peace of mind. I think anyone with assets or a half way decent j*b should have at least a million in coverage. Times we live in...
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Old 07-11-2018, 05:12 PM   #125
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I don't have it. Someone correct me if my understanding is wrong but I read somewhere that in a lawsuit your insurance will use your auto/home insurance limits first, anything beyond that is then covered under the umbrella policy ($1M umbrella would include the auto/home limits so it's only providing $600k of coverage if your auto/home covers $400k, if I recall). Since all my big assets are already protected from lawsuits i.e. primary residence, 401k, IRA the only exposure would be to my savings and investment accounts. These accounts are while sizable now, one, they still fall within the auto/home policy coverage limits and two if I'm sued for a bigger amount than that it still won't make or break me.
Even with the umbrella you could be sued for a higher amount than your policy covers so you can keep doing the what-ifs indefinitely.
I called my insurance agent regarding this issue. The umbrella policy is an add-on to your existing auto and/or home. If your auto has $400K liability and you were sued for an auto incident, you'd be covered for $1.4 M. If your home has $200K liability and you were sued for a non-auto incident, you'd be covered for $1.2M.
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Old 07-11-2018, 05:36 PM   #126
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2M, and I pay 145. annually for it. Seems to be a lot lower cost than others here.
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Old 07-11-2018, 06:30 PM   #127
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Other than peace of mind, have you benefited from having umbrella insurance?
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Old 07-11-2018, 06:40 PM   #128
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Other than peace of mind, have you benefited from having umbrella insurance?
Yes exactly the same way as my home owners, auto, health, disability and travel insurance. It’s insurance.
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Old 07-11-2018, 07:45 PM   #129
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Wouldn't the 2 main categories of protection be TIRA/401K and Irrevocable Trusts?


Yes, plus real estate held by spouses as tenants by the entireties.

To be thorough, one’s lawyer should scrutinize the list of property that is exempt from execution under state law and the federal bankruptcy code, versus all assets that one owns, and recommend insuring the value of all non-exempt assets. I believe in insuring that amount plus an additional amount to account for near-term growth / appreciation.

While the typical award in a tort case might be relatively small, that’s not why I insure. I insure to protect against tail risk: the $20 million verdict. Also, I am more vulnerable to attack than is John Q. Public due to my position and the possible perception (or hope) that I am rich.

I am reminded often about the poor guy, down on his luck, alcoholic, chronically unemployed, whose fortunes changed drastically for the better when his car was struck by a retired CEO. You don’t want to be underinsured if you are that retired CEO.
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Old 07-12-2018, 05:30 AM   #130
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Yes, plus real estate held by spouses as tenants by the entireties.

To be thorough, one’s lawyer should scrutinize the list of property that is exempt from execution under state law and the federal bankruptcy code, versus all assets that one owns, and recommend insuring the value of all non-exempt assets. I believe in insuring that amount plus an additional amount to account for near-term growth / appreciation.

While the typical award in a tort case might be relatively small, that’s not why I insure. I insure to protect against tail risk: the $20 million verdict. Also, I am more vulnerable to attack than is John Q. Public due to my position and the possible perception (or hope) that I am rich.

I am reminded often about the poor guy, down on his luck, alcoholic, chronically unemployed, whose fortunes changed drastically for the better when his car was struck by a retired CEO. You don’t want to be underinsured if you are that retired CEO.
Thanks for the response.
Most of my assets are in a 401K/TIRA account. Nevertheless, I did take out a 2mm policy here in FLA, as the drivers here are not great and I see remnants of many accidents on the highways and intersections.
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Old 07-12-2018, 06:35 AM   #131
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So to clarify how does ULC protects our 401K and IRA accounts? What I read here is it will pay for Attorney fees if ever sued but how else will it protect that money?

Sorry but I just didn't understand and want to clarify?
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Old 07-12-2018, 07:06 AM   #132
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The concept is that if your state has a law that protects retirement assets, the value of an umbrella policy is reduced because you pay to protect only assets outside the retirement bucket.
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Old 07-12-2018, 07:07 AM   #133
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So to clarify how does ULC protects our 401K and IRA accounts? What I read here is it will pay for Attorney fees if ever sued but how else will it protect that money?

Sorry but I just didn't understand and want to clarify?

Your 401k is protected by federal law if covered under ERISA, which most are. ERISA pensions are also protected. IRA protection is based on state law.
ULC does not directly protect any specific assets. It protects you from lawsuits up to the amount of the coverage, and the insurance company will use their lawyers to fight the lawsuit. If there is a $5M judgement against you and you have $5M coverage, you’re golden. If you only had $4M coverage, you’d be on the hook for $1M. But they couldn’t get your 401k. They could get any assets you have outside of your 401k unless protected by state law.
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Old 07-12-2018, 08:39 AM   #134
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Other than peace of mind, have you benefited from having umbrella insurance?
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Originally Posted by COcheesehead View Post
Yes exactly the same way as my home owners, auto, health, disability and travel insurance. It’s insurance.
Right. I don't know for sure that I'd do anything different, but it is reassuring to know that I've got the umbrella insurance behind me. Just for example, when I'm skiing, I could accidentally run into someone and they sue me. Maybe I'd think twice about going out if I had to worry about hiring my own lawyers and put my assets at risk first, but with insurance protecting the first part, and their lawyers behind me, I don't think about it at all. Same with leading a trail run or hike.

I still assess whether something is safe before going out myself or taking others out, but what I don't think about is passing on an activity out of concern for being sued.
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Old 07-12-2018, 10:30 AM   #135
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Thanks again for the clarification I understand it now. I just checked my coverage on the ranch and it is 1M worth of coverage for the place. My vehicles are only at 300K and house at 500K so it may be in my best interest to take out an ULC policy. I wll wee them today and get some prices. Thanks
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Old 07-12-2018, 11:16 AM   #136
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Some time back, a Facebook friend put up a lengthy post advocating for having an umbrella policy. Her husband was struck by a car on private property and badly injured. Since he was not in his car, his auto policy did not apply. Since it was an accident and not an illness, his health insurance didn't provide coverage. The teenage driver had insurance, but it had a low medical payout. Because it was private property the driver wasn't even issued a citation. They survived mainly because he was in a union and they continued to pay him a disability wage even though it wasn't technically required in this particular circumstance. I may not have all of the details exactly correct as she posted this over a year ago.

This situation, being injured by an uninsured or under-insured person, is why I've considered getting an umbrella policy so I'd like to ask if the above scenario is covered by a standard policy? In other words, coverage for medical expenses, physical therapy, and lost wages (while working) or is that a separate kind of umbrella policy?
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Old 07-12-2018, 11:59 AM   #137
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In the above example you'd need to make sure the umbrella also has uninsured/underinsured motorist coverage, which costs extra.

E.g., for my household RLI quotes me "Excess UM/UIM coverage with $1 million limits is included at a cost of $600."
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Old 07-12-2018, 12:15 PM   #138
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Thanks for the response.
Most of my assets are in a 401K/TIRA account. Nevertheless, I did take out a 2mm policy here in FLA, as the drivers here are not great and I see remnants of many accidents on the highways and intersections.

Not to mention the fact that FL has the highest number of uninsured drivers in the nation at 27%. So your umbrella needs to have a UM/UIM rider in case you are hit and badly injured by an uninsured motorist.
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Old 07-12-2018, 12:29 PM   #139
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This situation, being injured by an uninsured or under-insured person, is why I've considered getting an umbrella policy so I'd like to ask if the above scenario is covered by a standard policy? In other words, coverage for medical expenses, physical therapy, and lost wages (while working) or is that a separate kind of umbrella policy?

Umbrella policies cover you against liability lawsuits due to negligence on your part. If you get sued for an amount in excess of you underlying auto or home liability limits the umbrella company with cover you up to policy limits.

UM/UIM insurance is a rider offered by some companies to cover you for medical expenses and loss of income etc. In some cases a bad injury may cost 500K or more in rehab and LTC.
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Old 07-12-2018, 12:31 PM   #140
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Since it was an accident and not an illness, his health insurance didn't provide coverage. The teenage driver had insurance, but it had a low medical payout.
Excuse me? What do you mean health insurance doesn’t cover accidents?!?!
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