how much liability coverage?

perinova

Full time employment: Posting here.
Joined
Apr 18, 2006
Messages
563
Website from 'Progressive' mentions:
"Since injuries can cost a lot more than property damage, you'll want your total bodily injury limit (the second number to be higher than your net worth. For example, if your net worth is $90,000, then a good car insurance policy for you might be structured as $50,000/$100,000/$50,000, giving you $100,000 in total bodily injury coverage per accident."

I am sure there is a limit to this equation but the maximum offered is $250k/$500k/$100k, or there is $500k CSL (= Combined Single Limit).

Given the cost of medical care $250k per person is not very high so I am tempted to choose the Combined Single Limit option?

Anything above $500k would have to be taken care of by an Umbrella insurance, which I do not have now.
 
If you search the forum you will find many discussions about the amount of liability insurance you should carry. It is not necessarily tied to your net worth. As many have said here, a large insurance policy primarily serves to motivate the insurance company (and its lawyers) to fight hard if you are sued. You really should look into umbrella coverage. It's relatively inexpensive. And if you do have umbrella coverage, they will require certain limits on your underlying policies.
 
You should probably contact your insurance agent and ask for advice. They know the limits on your auto and umbrella insurance.
 
What kills me is the $250k/$500k/$100k option has stayed the same for 30+ years or as far back as I can remember. Shouldn't the liabilities options adjust for inflation over time?
 
What kills me is the $250k/$500k/$100k option has stayed the same for 30+ years or as far back as I can remember. Shouldn't the liabilities options adjust for inflation over time?

Many states have raised their minimum auto insurance requirements over the years.

I don't disagree with you at all, but as noted by Gumby in post #2, umbrella is an option to fill the gap.
 
There is no set math to determine how much liability coverage to carry. Where with a house to multiply square footage times an estimated cost to build that it determined by qualify of construction and you can get a decent number to rebuild and buy that limit of insurance. No such equation exists with liability coverage.

The simple answer? Buy as much as lets you sleep comfortably at night, or, as much as you can reasonably afford.

One thing to consider that agents and companies don't tell you is that your defense cost are unlimited in the typical auto and/or home policy. That's a huge benefit and lets you focus on how much money you think you'd need to settle a lawsuit or claim.
 
Net worth doesn't matter in my opinion. I want enough that provides me a good night's sleep. I thus want enough that I think it will pay most reasonably possible insurable lawsuits that could come against me. Even a person with little net worth probably doesn't want a lawsuit judgement following them around so get enough insurance! For us that number is $3m. For others it's more and others it's less.
 
A few years ago, I dropped my umbrella policy and only carry the state minimums on my cars now. Cost were rising to fast/often IMO. At the same time I searched for and found homeowners coverage that cut the cost on my home policy in half too. I'm thinking of going to fully self insuring before long.
 
I've been through all this quite recently.

One surprising thing was that to increase home owners liability was really cheap. To increase from $300k to $500k was $1 and to increase from $500k to $1m was $2. Crazy.

A $1m umbrella was $320 and to increase the umbrella from $1m to $2m was$256, so total of $576 for a $2m umbrella.

I ended going with a specialty company for the umbrella as we are snowbirds and the specialty company would allow me to drop liability and collision on the cars that are laid up in the garage while my insurer required that I keep liability coverage which effectively increased the cost of the umbrella.

Another tip for snowbirds is that while some states allow you to take off liability while the car is laid up, other states will suspend your driver's license if you cancel liability so you need to downgrade liability state minimums. (I suppose that they erroneously assume that if you cancel liability that you are still driving the car but uninsured.
 
A few years ago, I dropped my umbrella policy and only carry the state minimums on my cars now. Cost were rising to fast/often IMO. At the same time I searched for and found homeowners coverage that cut the cost on my home policy in half too. I'm thinking of going to fully self insuring before long.
I love your answer as it shows different people analyze the issue different and they're both right. I like self insuring small stuff but, for me, I like having someone else insure the big stuff. However, more and more I like the self insurance option to at least consider.
 
I was thinking of lowering my umbrella from$4Mil to $2Mil. I received this response today:


Allstate recently changed their underwriting guidelines on the umbrella policy this past October actually. Allstate changed the guidelines to cap the umbrella policies at $1 million. Therefore, all new umbrellas we issue cannot be more than the $1 million, and those that are grandfathered in currently can still have the limit they have like you and your $4 million, but if we were to lower it the only option would be $1 million.

It may be time to move.
 
I personally think it's pretty negligent of IL to have the low limits it has on car insurance.
Illinois' minimum car insurance requirements, drivers must have liability coverage with limits of $25,000 for bodily injury per person, $50,000 per accident and $20,000 for property damage per accident.

There are probably a lot of folks driving around with $25K coverage, so if they hit someone, that person has little chance of getting reimbursed for all the medical costs.
 
A few years ago, I dropped my umbrella policy and only carry the state minimums on my cars now. Cost were rising to fast/often IMO. At the same time I searched for and found homeowners coverage that cut the cost on my home policy in half too. I'm thinking of going to fully self insuring before long.
I won't self-insure, as it's too easy and expensive to defend oneself even from frivolous lawsuits. I think insurance protection is cheap compared to the alternative where a person depends upon good luck.

One car accident, and the cost could easily run into a million or more. Even if the person only sued for $150K, either you pay up, or you pay a lawyer a lot of money to defend you, the cost of which would probably hit $30K.

Without insurance somebody could just "slip" on your sidewalk walkway and demand $5K. Then what ?
 
Last edited:
I won't self-insure, as it's too easy and expensive to defend oneself even from frivolous lawsuits. I think insurance protection is cheap compared to the alternative where a person depends upon good luck.
Exactly. I mentioned before, the added benefit that goes missing or unappreciated is the defense the insurance company provides when you get sued. Lawyers cost a metric ton of money.
 
Way way back, for me it was cost effective to get the lowest possible Auto Liability limit, combined with Umbrella....not to mention getting higher liability coverage. I haven't checked if that still is the case, but I still insure myself that way. OP, research that option.
 
I was thinking of lowering my umbrella from$4Mil to $2Mil. I received this response today:


Allstate recently changed their underwriting guidelines on the umbrella policy this past October actually. Allstate changed the guidelines to cap the umbrella policies at $1 million. Therefore, all new umbrellas we issue cannot be more than the $1 million, and those that are grandfathered in currently can still have the limit they have like you and your $4 million, but if we were to lower it the only option would be $1 million.

It may be time to move.
If you do, you may never have another shot at obtaining even a $2MM UMB. Do the investigation with a broker/other carriers and also realize that a carrier is not required to grandfather in any existing limit. IN other words you may move a to carrier who does offer you a $2MM UMB at a price you want to pay and then, at any renewal in the future, they could drop that to $1MM, or even refuse to provide any UMB. At least with Allstate having gone on record with "grandfathering" it is LIKELY they will maintain that coverage level for you as long as you remain with them.
 
How much liability should I carry?

Ask yourself this.....If a negligent driver crippled me and killed my family in my car... how much would I sue them for?

This is how much liability insurance you should have.
 
I've been through all this quite recently.

One surprising thing was that to increase home owners liability was really cheap. To increase from $300k to $500k was $1 and to increase from $500k to $1m was $2. Crazy.

A $1m umbrella was $320 and to increase the umbrella from $1m to $2m was$256, so total of $576 for a $2m umbrella.

I ended going with a specialty company for the umbrella as we are snowbirds and the specialty company would allow me to drop liability and collision on the cars that are laid up in the garage while my insurer required that I keep liability coverage which effectively increased the cost of the umbrella.

Another tip for snowbirds is that while some states allow you to take off liability while the car is laid up, other states will suspend your driver's license if you cancel liability so you need to downgrade liability state minimums. (I suppose that they erroneously assume that if you cancel liability that you are still driving the car but uninsured.
Would you mind giving the name (or hint to) the speciality umbrella liability company (or message me)? I have had my current "highly rated company" for many, many years but have recently had some not so great interactions with them. I am in the middle of a interstate move done slowly, and complications have come up with them which I haven't liked. The latest being cancelling my existing umbrella policy and issuing it in the new state WITHOUT telling me the cost or even confirming that it would happen. Oh, at a higher cost and w/amendments that are negative. That, plus some other annoying things they did when I bought my new place and moved ONE (of my three/four) cars tothe new state have stirred me to examine this. Not the best of timing given I am extremely busy but it is what it is.

I've spoken to an independent agent in the new location and given them my policy info (two houses, three cars plus one w/o plates plus a $3M umbrella policy). I'm waiting to see what they come back with but trying to explore multiple paths at once (e.g. just moving the umbrella to another company for the moment).
 
Website from 'Progressive' mentions:
"Since injuries can cost a lot more than property damage, you'll want your total bodily injury limit (the second number to be higher than your net worth. For example, if your net worth is $90,000, then a good car insurance policy for you might be structured as $50,000/$100,000/$50,000, giving you $100,000 in total bodily injury coverage per accident."

I am sure there is a limit to this equation but the maximum offered is $250k/$500k/$100k, or there is $500k CSL (= Combined Single Limit).

Given the cost of medical care $250k per person is not very high so I am tempted to choose the Combined Single Limit option?

Anything above $500k would have to be taken care of by an Umbrella insurance, which I do not have now.
Easy answer to this question that comes up a lot.


Questioin #1. If someone hurts you and you can't work anymore....how much would you sue them for?

That is how much liability insurance you should have.
 
I was in an accident 2 months ago, other parties fault, it was a commercial truck with the minimum liability of 300k , helo ride and medical bills have just about tapped that out.
 
Would you mind giving the name (or hint to) the speciality umbrella liability company (or message me)? I have had my current "highly rated company" for many, many years but have recently had some not so great interactions with them. I am in the middle of a interstate move done slowly, and complications have come up with them which I haven't liked. The latest being cancelling my existing umbrella policy and issuing it in the new state WITHOUT telling me the cost or even confirming that it would happen. Oh, at a higher cost and w/amendments that are negative. That, plus some other annoying things they did when I bought my new place and moved ONE (of my three/four) cars tothe new state have stirred me to examine this. Not the best of timing given I am extremely busy but it is what it is.

I've spoken to an independent agent in the new location and given them my policy info (two houses, three cars plus one w/o plates plus a $3M umbrella policy). I'm waiting to see what they come back with but trying to explore multiple paths at once (e.g. just moving the umbrella to another company for the moment).

Yeah, I wish there was one-stop shopping for our two homes in different states and two cars registered in different states, boats and an umbrella but since insurance is regulated by state it isn't possible.

I've ended at the best spot that I can with the all the basic coverages with the same company but two different agents, one in each state.

Actually, now that I think of it, having a separate company for the umbrella will give me the flexibility to have the Texas house and truck and the Vermont house, car and boats with separate carriers if premiums are lower and it would be harded to do when the umbrella is with my Texas property insurer.
 
Back
Top Bottom