How Many Here Have Umbrella Liability Coverage?

[Marita40]

2M, and I pay 145. annually for it. Seems to be a lot lower cost than others here.

 

[Kwirk]

Other than peace of mind, have you benefited from having umbrella insurance?

 

[COcheesehead]

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.

 

[1-31-18]

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.

 

[Dtail]

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.

 

[street]

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?

 

[sengsational]

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.

 

[Dash man]

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.

 

[RunningBum]

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.

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.

 

[street]

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

 

[NoiseBoy]

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?

 

[ncbill]

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."

 

[Corporateburnout]

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.

 

[Corporateburnout]

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.

 

[audreyh1]

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?!?!

 

[gauss]

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.

I am skeptical of this as described. Around here, my understanding is that the injured husband would access the hospital etc with his medical insurance card.

The hospital and/or his medical insurance company would ask a whole lot of questions on how the injury occurred. If an insured driver contributed to the accident, then the medical insurance company's subrogation unit would directly pursue reimbursement from the responsible auto insurance company.

Disclaimer - I do live in an auto "no-fault" state, so this may work differently elsewhere.

Excuse me? What do you mean health insurance doesn’t cover accidents?!?!

Perhaps the medical insurance of the husband was one of those hollow policies that have since been banned by the ACA.

-gauss

 

[Dash man]

The only way I could see health insurance not covering an accident is if it’s work related, and workers compensation would cover it.

 

[SumDay]

Other than peace of mind, have you benefited from having umbrella insurance?

Yes, I had an anti-government kook, representing himself (not a lawyer) who tried to steal a house from me. The State Farm lawyers were bulldogs and in spite of the fact he filed thousands of pages of gobbeldy-gook nonsensical motions, it was dismissed with prejudice. I could write a book...

 

[TuborgP]

Yes 2 million in Umbrella

 

[NoiseBoy]

Excuse me? What do you mean health insurance doesn’t cover accidents?!?!

Which is why I included a closing disclaimer that I may not have all of the details correct. I just recall that, as she described it, the situation was one where they thought they had all of the insurance that you needed, but discovered that they were not as covered as they thought. Maybe it was as simple as the problem of subtracting one spouse's income for an extended period of time from a family of four living in a Chicago suburb? I mainly recall that her story was heartfelt and left an impression on me that there were probably gaps in my own insurance, although possibly only for very rare situations.

Thanks for the clarification on the meaning of liability umbrella insurance and the need to get a rider for my friend's situation.

 

[RAMingione]

Many folks use NW as a guide to amount of umbrella coverage, but NW has only indirect bearing on how much a claimant might seek should one suffer a liability event (although their lawyers will certainly try to judge how much they might successfully obtain in a settlement based on your NW). Rather think of your umbrella coverage as a "moat". How high do you want to build your moat before any settlement attacks your assets? You can have coverage equal to NW, but nothing limits size of a claim other than what a lawyer thinks might potentially be awarded.

 

[medved]

I am late to this discussion but I am interested because I am considering increasing my umbrella coverage. I can get a good group rate -- about $700/year for $5mm; just under $1300/year for $10mm. But I am not sure how to analyze how much to buy. Some people say "enough to cover your assets" or "enough to cover your non-exempt assets (those assets reachable by a tort creditor)."

But I am not sure that analysis makes sense because -- no matter what coverage amount you have -- a tort creditor can always look to that amount, plus an additional amount up to the total amount of reachable assets you have. So it seems to me the better analysis might be "how much would it take to resolve pretty much any tort claim you could reasonably anticipate." But that is really hard to say.

So, I don't know what to do...

 

[Cpadave]

I am late to this discussion but I am interested because I am considering increasing my umbrella coverage. I can get a good group rate -- about $700/year for $5mm; just under $1300/year for $10mm. But I am not sure how to analyze how much to buy. Some people say "enough to cover your assets" or "enough to cover your non-exempt assets (those assets reachable by a tort creditor)."

But I am not sure that analysis makes sense because -- no matter what coverage amount you have -- a tort creditor can always look to that amount, plus an additional amount up to the total amount of reachable assets you have. So it seems to me the better analysis might be "how much would it take to resolve pretty much any tort claim you could reasonably anticipate." But that is really hard to say.

So, I don't know what to do...

I would say if you are a high risk person. Like a practicing doctor or drive a lot, you should get a proper asset protection planning. Most assets will be in somewhat protected entity. Otherwise, just buy enough coverage that will force the insurance company to hire top attorneys for the case. Maybe 2-3Mil.

 

[stephenson]

Hi All,

Great thread!

We have four rental houses in Florida, a couple of cars, a power boat and a personal home.

We have quotes of $500ish for $1M, $750ish for $2m and $1K for $3M.

OR, should we get two policies? One to cover personal home, vehicles and boat, and another to cover the four rental houses?

Three companies - USLI, RLI and Hudson - AM Best says USLI is the best and Hudson the least good. Thoughts?

Oh yeah, and not wxxrking.

Thanks!

 

[Cpadave]

Hi All,

Great thread!

We have four rental houses in Florida, a couple of cars, a power boat and a personal home.

We have quotes of $500ish for $1M, $750ish for $2m and $1K for $3M.

OR, should we get two policies? One to cover personal home, vehicles and boat, and another to cover the four rental houses?

Three companies - USLI, RLI and Hudson - AM Best says USLI is the best and Hudson the least good. Thoughts?

Oh yeah, and not wxxrking.

Thanks!

Is the rental house held in a LLC or separate entity? Rental property can be considered high risk asset. Something happens to tenant or another person and they will sue the landlord. We had a rental house many years ago. Got sued by tenant and mail person. I think putting that asset in a separate entity with separate Lib insurance might be a good idea.