FANOFJESUS
Thinks s/he gets paid by the post
True but many times people only sue you for the insured amount. I don't know why this is?
Increase umbrella coverage to $ 5 M?
- Thread starter MrLoco
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True but many times people only sue you for the insured amount. I don't know why this is?
I have $5mm umbrella, even though NW is higher. I just think the risk of litigation that costs more than $5mm (plus my underlying auto limits, if the claim is auto related) to defend/settle is very low.
I do think there is a relationship between NW (or, I guess I should say, the value of non-exempt assets) and umbrella coverage levels, in this sense: If I had, say, $750,000 in non-exempt assets, and I get a $5 million judgment against me, I can always file a personal bankruptcy case, give the trustee the $750,000, and discharge the remainder of the judgment (assuming the judgment is not within the category that is nondischargeable). So all the coverage I would need to protect my non-exempt assets and avoid having to file bankruptcy would be $750,000. But if my non-exempt assets were, say, $5 million, then absent insurance coverage, I could have to give $5 million to the trustee, to get a discharge, so I have more NW to protect by insurance.
I am not saying umbrella coverage should equal NW or non-exempt assets (and I am sure as heck not giving anyone legal advice; I am not qualified to do that!), but I do think the amount of NW (or non exempt assets) is relevant to the decision about amount of coverage. And I guess, now that I am typing this, maybe I should increase my coverage levels....
I do think there is a relationship between NW (or, I guess I should say, the value of non-exempt assets) and umbrella coverage levels, in this sense: If I had, say, $750,000 in non-exempt assets, and I get a $5 million judgment against me, I can always file a personal bankruptcy case, give the trustee the $750,000, and discharge the remainder of the judgment (assuming the judgment is not within the category that is nondischargeable). So all the coverage I would need to protect my non-exempt assets and avoid having to file bankruptcy would be $750,000. But if my non-exempt assets were, say, $5 million, then absent insurance coverage, I could have to give $5 million to the trustee, to get a discharge, so I have more NW to protect by insurance.
I am not saying umbrella coverage should equal NW or non-exempt assets (and I am sure as heck not giving anyone legal advice; I am not qualified to do that!), but I do think the amount of NW (or non exempt assets) is relevant to the decision about amount of coverage. And I guess, now that I am typing this, maybe I should increase my coverage levels....
Just_Steve
Thinks s/he gets paid by the post
As explained to me by a lawyer is that juries tend to shy away from large awards when you are going after someones home or bank account, as long as the insurance is paying its all good.
bobandsherry
Thinks s/he gets paid by the post
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From experience, higher umbrella coverage means that in the event you are sued they will hope to sue you for more. Daughter several years ago had accidental, she was found at fault and was on our policy. Once the attorney of person she had accident with learned of our umbrella policy they made an effort for big settlement (our attorney told us this). In the end she received only out of pocket costs.
Fedup
Thinks s/he gets paid by the post
I carry huge liability on my car insurance, last time somebody near my daughter's school didn't turn on headlight in a rainy night, on purpose, staging an accident, I might add, she only got $25k. My kid was at fault, she turned left, but she didn't remember the headlights on.
Dash man
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I don't believe there is any legal requirement to disclose the amount of insurance coverage...especially umbrella coverage. Best to keep it quiet.
audreyh1
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I wonder about this. Can you be compelled to disclose this? Just the fact that the insurance company is involved - does the coverage become known somehow?
audreyh1
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Same difference. You think people usually volunteer this information?
REWahoo
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As in most legal matters, the answer is complicated: https://www.irmi.com/articles/exper...-in-liability-claims-a-landmine-for-bad-faith
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audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
there is something wrong with your URL.
Like other financial insurance, need for liability protection has to be based on risk, not assets. If there is no business or professional risk involved, I would guess most people would not need more than $1M - $2M unless they have very specific risk needs that are not common. Here's a checklist that helps identify one's own risk profile. http://www.eqgroup.com/Pdf/ACE/ACE-personal-liability-risk-scorecard.pdf
REWahoo
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Interesting thread.
(underlining / highlighting is mine)
After reading the link from REWahoo, I wonder if you actually should... ? In other words, the plaintiff may consider insurance coverage as something you would easily give up (and you just might), and offer to settle up to that amount. Something that you and plaintiff have as common interest in (and not the insurance company).
@MichaelB: thank you for the link, too! I like that link and I agree that it makes sense that insurance should be based on your risk. I don't fully get when people say it "covers" their net worth. Instead, your net worth is just $X further away from the potential claim. $1M is probably more than enough of a "moat" for most people.
Then again, I suppose if plaintiff sees that you have $10M assets and $1M insurance, they are more likely to NOT settle (potential for $11M judgement vs $1M) as opposed to when you have $2M assets + $1M insurance; so perhaps some relationship between the two makes sense... ?
(underlining / highlighting is mine)
After reading the link from REWahoo, I wonder if you actually should... ? In other words, the plaintiff may consider insurance coverage as something you would easily give up (and you just might), and offer to settle up to that amount. Something that you and plaintiff have as common interest in (and not the insurance company).
@MichaelB: thank you for the link, too! I like that link and I agree that it makes sense that insurance should be based on your risk. I don't fully get when people say it "covers" their net worth. Instead, your net worth is just $X further away from the potential claim. $1M is probably more than enough of a "moat" for most people.
Then again, I suppose if plaintiff sees that you have $10M assets and $1M insurance, they are more likely to NOT settle (potential for $11M judgement vs $1M) as opposed to when you have $2M assets + $1M insurance; so perhaps some relationship between the two makes sense... ?
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Dash man
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
The insurance company attorneys represent the insurance company and not the policy holder. It may be wise to hire your own attorney to represent your own interests while working with the insurance company. The severity of an injury affects the eventual award, and any negligence can significantly increase the punitive award. I would think the nature of the case should be considered in whether to divulge insurance limits or not. The insurance contract itself may require the insured to not reveal limits. I think I'll read my contract more closely.
45th Birthday
Recycles dryer sheets
Funny story about liability insurance and lawsuits. I once owned a company that had a great deal of intellectual property. Another company (then well-known and much larger) infringed on some of our copyrights. We sued them.
We ended up in federal district court, and a magistrate called us into his chambers to try to get us to settle. Attending was a representative from their insurance company, along with one of their annoying attorneys who, as part of the negotiations threatened to sue us (for no grounds). The judge laughed. It went downhill (for them) from there.
Finally, the insurance guy announced the he "had been cloaked with some authority" to settle the matter for a few hundred thousand. The judge practically blew a gasket. He firmly reminded the defendants that he had ordered that someone with full authority to settle the matter be in attendance and he was considering holding them in contempt. Frantic phone calls ensued.
They came back with full authority to settle, beyond the amount the insurance company offered (never knew their policy limit, just that they had coverage). We ended up settling for a very high six figure amount. The company went into Chapter 11 a year later.
We ended up in federal district court, and a magistrate called us into his chambers to try to get us to settle. Attending was a representative from their insurance company, along with one of their annoying attorneys who, as part of the negotiations threatened to sue us (for no grounds). The judge laughed. It went downhill (for them) from there.
Finally, the insurance guy announced the he "had been cloaked with some authority" to settle the matter for a few hundred thousand. The judge practically blew a gasket. He firmly reminded the defendants that he had ordered that someone with full authority to settle the matter be in attendance and he was considering holding them in contempt. Frantic phone calls ensued.
They came back with full authority to settle, beyond the amount the insurance company offered (never knew their policy limit, just that they had coverage). We ended up settling for a very high six figure amount. The company went into Chapter 11 a year later.
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