Umbrella Insurance

[pb4uski]

My umbrella went up 65% this year.

Evidently, last year they had a billing error and only charged me $3 for UM coverage... I had thought it strange that my umbrella premium went down so much but hadn't noticed that detail... and they corrected it this year.

That said... do those of you who buy an umbrella policy include uninsured motorist coverage? As I understand it, it would protect us and occupants of our vehicle from damages caused by uninsured motorists.... so if someone who was uninsured hit me and I or another occupant needed to be in a nursing home for life it would cover something like that.

I'm just wondering if UM coverage for the umbrella is necessary or not... $223 for 2018-2019 vs $338 for basic umbrella.

ETA: I think this link has convinced me to part with $223 for coverage... especially since we spend 5-6 months in Florida, which has many uninsured motorists.

http://bushins.com/insurance-and-the...ally-worth-it/

Quote:

Jim was looking forward to a relaxing day of golf with his neighbor, Bob. Jim pulled into Jim’s drive and popped the trunk. Bob threw in his clubs and then hopped into the front passenger seat. “Great day for golf, Jim” Bob said as Jim drove out of his driveway in Brentwood and pulled onto Franklin Road. “The trees are beginning to show color and the temperature is just right. Not too hot, not too cold, beautiful Nashville day” replied Jim as he pulled up to a stop sign. He signaled a left turn and began his turn on to the main highway leading to the golf course. That’s all he remembers before waking up in the hospital. The unthinkable had happened. A speeding drunk driver had T-boned Jim’s car. The drunk driver’s car had hit directly on the front door of the passenger’s side. Jim’s injuries were not too bad. But Bob’s were massive and serious. Now, 18 months later, Bob is struggling to walk. He has not returned to work. He suffered severe back and head injuries. He is tormented with blurred vision and has problems concentrating. Bob sued the drunk driver. But the drunk driver had no insurance and no assets. As bad as Bob hated to do so, he file suit against his friend Jim. He had to recover his lost wages and the loss of future earnings caused by his disabling injuries. He had to support his family. Jim understood, of course. Bob’s suit was for $800,000. Considering his loss of earnings as an engineer, this amount was justified. Jim has auto insurance with $500,000 underinsured and uninsured motorist limits. Jim also purchased an umbrella policy for $1,000,000. He thinks his protection is adequate. The trouble is Jim is going to be $300,000 short! You see, many insurance companies do not offer underinsured and uninsured motorist coverage under their umbrella policies. Does yours?

[Dtail]

Quote:

Originally Posted by pb4uski My umbrella went up 65% this year. Evidently, last year they had a billing error and only charged me $3 for UM coverage... I had thought it strange that my umbrella premium went down so much but hadn't noticed that detail... and they corrected it this year. That said... do those of you who buy an umbrella policy include uninsured motorist coverage? As I understand it, it would protect us and occupants of our vehicle from damages caused by uninsured motorists.... so if someone who was uninsured hit me and I or another occupant needed to be in a nursing home for life it would cover something like that. I'm just wondering if UM coverage for the umbrella is necessary or not... $223 for 2018-2019 vs $338 for basic umbrella.

Your thinking is correct.
Besides in FLA, (potentially in your future full time), they have one of the highest UM% in the nation and thus one really needs to cover that aspect in their Umbrella policy.

[audreyh1]

Quote:

Originally Posted by TwoByFour Can you tell me more about how the umbrella policy works? I assume it only kicks in after primary coverage is exceeded, yes? But what if your primary does not cover a certain event, will the umbrella still work? Here is my situation - we live in a hurricane prone area (Hawaii) and have a separate policy for hurricane coverage because our homeowner's explicitly excludes hurricane damage. But the hurricane policy only covers damage to our structures, not to neighbors who are harmed by any trees from our property that fall on their houses. We have big trees and they worry me so I want to get coverage for that and was thinking an umbrella policy. Any ideas if it would work?

This is something to discuss with your insurance agent. Our umbrella specifies what other coverage we must carry.

[flintnational]

Regarding uninsured/underinsured motorist coverage, the financial risks are death, disability, LTC and medical expenses. UM falls into a category of insurance that effectively only covers losses for a single event (similar to cancer policies). IMO, a UM policy is like buying a policy that covers these losses on Tuesdays only. Its better than nothing but you are uninsured six days of the week.

Often these risks are covered elsewhere. If not, IMHO, use the UM premium to shore up a comprehensive insurance program that covers these losses from any cause. Being killed or injured by an UM is probably fairly low on the causes of death, disability and LTC. A comprehensive program with broad coverage would negate the need for UM or at least UM would be duplicative.

[COcheesehead]

Quote:

Originally Posted by Golden sunsets Your policy probably doesn’t include Uninsured/Underinsured motorists. That adds quite a bit to the premium and for us is worth the additional cost. We carry 4MM -cost is $633.

My auto policy is at max coverage for uninsured/underinsured. I had a agent friend tell me the add on to the umbrella is all just profit for the carrier.

[pb4uski]

But the max coverage for UM for my base policy is only $500k... in the example above, if Bob's damages are severe and he sues me for $800k and prevails then $300k comes out of my wealth... with UM on my umbrella I am fully covered and the insurer has 800,000 good reasons to give me the best defense possible.

[flintnational]

*Its been I awhile since I looked at all of this. So, double check before acting on my statements. Also, auto insurance and tort law are State specific. Consult your insurance agent.

Passengers are not excluded in the BI section of an auto liability policy. The bodily injury section of an auto liability policy will pay for sums the insured is legally obligated to pay. So, first an injured passenger would need to establish that the driver of his vehicle was responsible and not the drunk driver. Depending on the State this might be possible. Some States allow comparative negligence. If the passenger meets this hurdle, the BI section of the policy would respond to the claim. If the passenger cannot show legal liability against the driver of his car, no claim exists against this driver. UM responds to a passenger even if the driver of his car is not liable and the at fault driver is underinsured. But you would not have any legal liability to make payments in the absence of UM.

Agents like to sell UM. Its high margin coverage. And, the losses are often covered under other policies. Many insurance policies preclude double payments. So, even if there is a claim, they will split it with the medical carrier or only be excess coverage.

[Dtail]

Quote:

Originally Posted by COcheesehead My auto policy is at max coverage for uninsured/underinsured. I had a agent friend tell me the add on to the umbrella is all just profit for the carrier.

Will check into that for my Umbrella.

[Corporateburnout]

Our original umbrella policy did not include a UM/UIM rider. It protected us only against liability for negligence in an auto or home accidents. Our base auto insurance has a max 300K in UM/UIM coverage so we added a rider on our umbrella for an additional 1M in coverage.


Our state has one of the lowest uninsured motorists rate in the nation but the coverage cost is so cheap it's worth the peace of mind.

[Fedup]

I too have to check my umbrella insurance but I believe I have covered to the max for car insurance. My kids did too, it was not a lot of money either.

[ncbill]

Quote:

Originally Posted by flintnational Does anyone have access to umbrella/excess liability claims distribution data? A data distribution would tell what percent of claims you would be protected against at a given policy limit. As an example, the data may show 98% of claims are below $1M and 99% are below $2M. (In reality, I suspect the difference between $1M and $2M is less than 1% and both cover way over 99% of claims. But, just a guess.) With one exception*(that I can think of), asset levels do not impact the above. Whether you have $1M or $2M in assets, both have the same risk of being sunk by a >$3M settlement or judgement. In other words, your risk of a large event does not change with a change in net worth. (see the exception below) *That exception, yes you are more of a target as your wealth increases. Like bank robbers, plaintiffs tend to go where the money is.

Can you find a $3 million non-default judgment against an individual who wasn't DUI?

The reality is...the plaintiff takes the certain payoff of your policy limits, or they have to wait years for the possibility of any money until after trial & all appeals are exhausted.

The last liability (personal injury) case where I was peripherally involved was against an employer...took over 5 years...and the plaintiff lost, after rejecting a settlement of at least $1 million offered at the beginning of their litigation.

[flintnational]

^^My experience has been similar. Even if the plaintiff has a good case, there is a lot of pressure to take the insurance limits/offer available and move on. Lawsuits take years, are uncertain and stressful. But, that assumes reasonable limits are in place making resolution a good option for the plaintiff. High assets and low limits might give the plaintiff no choice but to proceed with a lawsuit.

[Fedup]

They take at even lower amount. My sister’s friend hit some Mexicans here in California, they did sue but ended up settled for $500K per person. She had $5 million insurance, not sure umbrella or not, but she’s a doctor who worked late one night and didn’t see these people when she hit them.

[fh2000]

Quote:

Originally Posted by pb4uski My umbrella went up 65% this year. Evidently, last year they had a billing error and only charged me $3 for UM coverage... I had thought it strange that my umbrella premium went down so much but hadn't noticed that detail... and they corrected it this year. That said... do those of you who buy an umbrella policy include uninsured motorist coverage? /[/url]

My California auto insurance carries uninsured motorist. My Umbrella insurance therefore does not carry that. Both are from the same company.

I am not sure how you file a claim in the event of an auto accident caused by an uninsured motorist. Do you file it against your umbrella if it carries UM? You will still need to report to your auto insurance, correct?

[pb4uski]

My base auto policy has UM too... with the same $500k limit as liability... and then the umbrella is on top of that.

My understanding is that you (or an injured party, like a passenger) would file a claim with your insurer.

[Big_Hitter]

Quote:

Originally Posted by ncbill Can you find a $3 million non-default judgment against an individual who wasn't DUI?

potentially this guy?

https://www.idahostatesman.com/news/...220172035.html

[Corporateburnout]

Quote:

Originally Posted by pb4uski My base auto policy has UM too... with the same $500k limit as liability... and then the umbrella is on top of that. My understanding is that you (or an injured party, like a passenger) would file a claim with your insurer.

+1.


You file a claim with your auto insurance up to the UM policy limit then you file with the umbrella for the excess. On my umbrella policy documents it's called "excess UM/UIM coverage"

[mystang52]

Quote:

Originally Posted by TwoByFour Can you tell me more about how the umbrella policy works? I assume it only kicks in after primary coverage is exceeded, yes? But what if your primary does not cover a certain event, will the umbrella still work? Here is my situation - we live in a hurricane prone area (Hawaii) and have a separate policy for hurricane coverage because our homeowner's explicitly excludes hurricane damage. But the hurricane policy only covers damage to our structures, not to neighbors who are harmed by any trees from our property that fall on their houses. We have big trees and they worry me so I want to get coverage for that and was thinking an umbrella policy. Any ideas if it would work?

You must ALWAYS check your individual policy [i.e., in advance of any possible loss] as to what is covered, and excluded. That being said, Umbrella policies typically "drop down" and cover many losses that may not be covered by the underlying policy. However, this drop down coverage will likely have a substantial deductible.

[Fedup]

Quote:

Originally Posted by fh2000 My California auto insurance carries uninsured motorist. My Umbrella insurance therefore does not carry that. Both are from the same company. I am not sure how you file a claim in the event of an auto accident caused by an uninsured motorist. Do you file it against your umbrella if it carries UM? You will still need to report to your auto insurance, correct?

They have it in my umbrella.

[meleana]

We have 1 million from Allstate and it costs $405 per year in NY. But I just got another quote from Progressive for the same at $235.


I would of course, have to move my auto policy to them. I already have homeowners with them. This would save me almost $500 per year if I decide to change to them.