Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Question about umbrella insurance
Old 12-06-2021, 01:28 PM   #1
Recycles dryer sheets
 
Join Date: Jun 2014
Location: Central FLA
Posts: 240
Question about umbrella insurance

How did you arrive at the amount of coverage you believed you need?

What considerations should be taken into account

Thank you!
SunnyOne is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-06-2021, 01:38 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,324
I don’t know if there really is a right number. This topic has been covered before. I chose to cover my net worth at the time which also happened to be the max my provider would give without further underwriting steps.
COcheesehead is offline   Reply With Quote
Old 12-06-2021, 01:57 PM   #3
Recycles dryer sheets
erkevin's Avatar
 
Join Date: Oct 2014
Location: Tennesee
Posts: 478
I also chose our net worth as the number.
erkevin is offline   Reply With Quote
Old 12-06-2021, 02:01 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,324
I will also throw in the old rule of thumb. The more you have, the more the insurance company has to lose, the more they will defend you.
COcheesehead is offline   Reply With Quote
Old 12-06-2021, 02:38 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ExFlyBoy5's Avatar
 
Join Date: May 2013
Location: ATL Native now in Flyover Country
Posts: 5,812
Quote:
Originally Posted by COcheesehead View Post
I will also throw in the old rule of thumb. The more you have, the more the insurance company has to lose, the more they will defend you.
Pretty much was how we came to the number and nd overall net worth. The additional $1MM didn't cost too much, either.
__________________
FIRE'd in 2014 @ 40 Years Old
Professional Retiree
ExFlyBoy5 is offline   Reply With Quote
Old 12-06-2021, 02:44 PM   #6
Recycles dryer sheets
 
Join Date: Jun 2014
Location: Central FLA
Posts: 240
I was trying to think of the situations where I might need it - all I can think of is an act that results from my driving/use of my vehicle.

I don't own any property or businesses.

What other circumstances might give rise to needing it (assume the primary is vehicle accidents)?
SunnyOne is offline   Reply With Quote
Old 12-06-2021, 03:07 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,324
It covers you above and beyond the liability limits of your insurance policies. So auto, renters or home. In general, injury or property damage to others including defamation.

The only person I know who had to use their umbrella policy struck a pedestrian with their car.
COcheesehead is offline   Reply With Quote
Old 12-06-2021, 03:13 PM   #8
Moderator
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 9,934
Quote:
Originally Posted by SunnyOne View Post
How did you arrive at the amount of coverage you believed you need?

What considerations should be taken into account

Thank you!
This is a frequent topic. Search "umbrella" and you'll find a dozen threads and many opinions:

https://www.early-retirement.org/for...ge-109224.html

The short answer is: Get as much coverage as you think is enough for the insurance company to prefer to use their good lawyer vs. paying.

We have a $1M policy.
Aerides is offline   Reply With Quote
Old 12-06-2021, 03:28 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 8,947
Some folks believe 1 or 2m is the minimum to have in order for the lawyers to fight for you.
We have a 2m policy and moved from Liberty Mutual to Travelers and saved some monies.
__________________
TGIM
Dtail is offline   Reply With Quote
Old 12-06-2021, 04:27 PM   #10
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 3,698
We went for the $5M umbrella policy on top of our $1M auto/home coverages. Itís cheap insurance for that split second mistake that might lead to a bad accident.
Dash man is offline   Reply With Quote
Old 12-06-2021, 05:00 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 7,547
I had a mill for decades. When I tried to increase to 3 mill, they only upped it to two.

I dunno, wait and see period? And the second mill cost twice as much as the first.
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is online now   Reply With Quote
Old 12-06-2021, 06:13 PM   #12
Dryer sheet aficionado
 
Join Date: Jan 2019
Posts: 44
Quote:
Originally Posted by COcheesehead View Post
It covers you above and beyond the liability limits of your insurance policies. So auto, renters or home. In general, injury or property damage to others including defamation.

The only person I know who had to use their umbrella policy struck a pedestrian with their car.
We had to use ours when my son, who was in high school at the time, hit someone who ran a red light. The other driver sued us. With a high limit policy, I let the insurance company hire the lawyer to defend my son. (He was driving my car and completely in the right.)
lakerunner is offline   Reply With Quote
Old 12-06-2021, 08:00 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Jul 2013
Posts: 1,347
We started at $1M, then bumped it up to $2M when our net worth reached that number.

Not planning on increasing it again, even though our net worth is well past that now. IMO, there is a point of diminishing returns when it comes to umbrella policies.
mrfeh is offline   Reply With Quote
Old 12-06-2021, 08:04 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,324
I did 5m which was the top end without triggering an additional underwriting process involving asset verification which to us sounded like brain damage.
COcheesehead is offline   Reply With Quote
Old 12-06-2021, 08:12 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Nov 2015
Posts: 2,344
Might be interesting to know who has ever had to use their umbrella and how much was awarded and what was left uncovered.


Personally, I don't understand the basis based on net worth. If you have $1mil net worth and have $1 mil coverage and you are responsible for an award of $2 mil you are screwed. Reasonable answer is what you think the worse case could be, then you have a max, then adjust downward based on gut plus feel. Knowing answer to my original question above might help to get that answer.

For me, daughter was involved in accident. I had $1mil umbrella. Attorney said that having umbrella attracts more frivolous lawsuits, and the more coverage you have the bigger the feast looks for sucker to get what they can from you. Insurance fought hard as it was their dime that would be spent, their attorney and no cost at all to us. The attorney found lots of "dirt" on the other party. The other party in the end just got their medical expenses covered, as they would have right from the start. They ended up losing as they weren't awarded their legal costs.
bobandsherry is offline   Reply With Quote
Old 12-06-2021, 08:26 PM   #16
Thinks s/he gets paid by the post
 
Join Date: May 2006
Location: Orlando
Posts: 2,357
Quote:
Originally Posted by SunnyOne View Post
I was trying to think of the situations where I might need it - all I can think of is an act that results from my driving/use of my vehicle.

I don't own any property or businesses.

What other circumstances might give rise to needing it (assume the primary is vehicle accidents)?
Someone in insurance told me once that 85%+ of claims were automobile related.
Buckeye is offline   Reply With Quote
Old 12-06-2021, 10:15 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,324
Quote:
Originally Posted by bobandsherry View Post
Might be interesting to know who has ever had to use their umbrella and how much was awarded and what was left uncovered.


Personally, I don't understand the basis based on net worth. If you have $1mil net worth and have $1 mil coverage and you are responsible for an award of $2 mil you are screwed. Reasonable answer is what you think the worse case could be, then you have a max, then adjust downward based on gut plus feel. Knowing answer to my original question above might help to get that answer.

For me, daughter was involved in accident. I had $1mil umbrella. Attorney said that having umbrella attracts more frivolous lawsuits, and the more coverage you have the bigger the feast looks for sucker to get what they can from you. Insurance fought hard as it was their dime that would be spent, their attorney and no cost at all to us. The attorney found lots of "dirt" on the other party. The other party in the end just got their medical expenses covered, as they would have right from the start. They ended up losing as they weren't awarded their legal costs.
The difference between million dollar increments is a hundred or two. Itís not worth screwing around for that amount of money.
COcheesehead is offline   Reply With Quote
Old 12-07-2021, 06:22 AM   #18
Dryer sheet aficionado
swaneesr's Avatar
 
Join Date: Dec 2017
Location: MSP
Posts: 48
I think lifestyle plays a big role in this and only you can assess your risk factors. DW and I have higher than normal risks.

We own a cabin. This brings into play visitors to the property and usage of boats and ATVs etc.

Fortunately for us, as we get older our children can own the toys and we will provide the boring pontoon and tiny 14í fishing boat.


Swanee
swaneesr is offline   Reply With Quote
Old 12-07-2021, 09:13 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Jul 2002
Posts: 1,425
Quote:
Originally Posted by swaneesr View Post
I think lifestyle plays a big role in this and only you can assess your risk factors. DW and I have higher than normal risks.

We own a cabin. This brings into play visitors to the property and usage of boats and ATVs etc.

Fortunately for us, as we get older our children can own the toys and we will provide the boring pontoon and tiny 14’ fishing boat.


Swanee
+100

I started the referenced thread (see post #8) last spring as a previous discussion of continue to carry umbrella liability coverage. Lots of posts back then that were worthy of a good insurance salesman!!

What was not mentioned enough, and I had even forgot the primary reason I purchased umbrella coverage some 15 years ago was the risk exposure at the time. With two young boys, I was heavily involved in supporting their activities such as volunteer coach, scout leader, treasurer, and driver. It was not unusual for me to have 3 or 4 of their friends in my car travelling to an away campout or a Sunday afternoon soccer match within 70 miles of home. This led me to seek additional liability coverage.

now that both boys are launched into their careers, my involvement in volunteer activities is almost non- existent. Also, when the boys were young drivers, I wanted the additional coverage but they now have their own cars and insurance so that financial risk is gone also. Gave up my position as treasurer of a scout troop over a year ago as the last vestige of involvement so my exposure to liability is much much less. I found that, with my insurance, it was much cheaper to increase the auto and home liability to the max than to continue an umbrella add-on.

However, I found that under my auto policy proerty damage liability, the insurance company will not write coverage over #100K. In this day of expensive pickup trucks and expensive cars around, I've retained the umbrella coverage as I consider the auto insurance coverage too low and I get all the other benefits others have pointed out in the thread.
RE2Boys is offline   Reply With Quote
Old 12-07-2021, 09:27 AM   #20
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 4,324
Quote:
Originally Posted by RE2Boys View Post
+100

I started the referenced thread (see post #8) last spring as a previous discussion of continue to carry umbrella liability coverage. Lots of posts back then that were worthy of a good insurance salesman!!

What was not mentioned enough, and I had even forgot the primary reason I purchased umbrella coverage some 15 years ago was the frisk exposure at the time. With two young boys, I was heavily involved in supporting their activities such as volunteer coach, scout leader, treasurer, and driver. It was not unusual for me to have 3 or 4 of their friends in my car travelling to an away campout or a Sunday afternoon soccer match within 70 miles of home. This led me to seek additional liability coverage.

Know that both boys are launched into their careers, my involvement in volunteer activities is almost non- existent. Also, when the boys were young drivers, I wanted the additional coverage but they now have their own cars and insurance so that financial risk is gone also. Gave up my position as treasurer of a scout troop over a year ago as the last vestige of involvement so my exposure to liability is much much less. I found that, with my insurance, it was much cheaper to increase the auto and home liability to the max than to continue an umbrella add-on.
In order to have the umbrella, we had to take our auto limits to the max.
COcheesehead is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 5 (1 members and 4 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Umbrella Insurance Question garyt FIRE and Money 10 10-10-2020 08:42 PM
To "umbrella" or not to "umbrella"... aza455 Other topics 107 05-19-2016 08:59 PM
Umbrella insurance and being falsely accused summer2007 FIRE and Money 47 06-08-2009 12:05 PM
protecting assets- umbrella/liability insurance? nphx FIRE and Money 22 01-08-2009 10:00 PM
Umbrella insurance levels while ER ? Delawaredave FIRE and Money 77 11-05-2007 01:25 PM

» Quick Links

 
All times are GMT -6. The time now is 11:03 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.