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.
How did you arrive at the amount of coverage you believed you need?
What considerations should be taken into account
Thank you!
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.
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)?
The difference between million dollar increments is a hundred or two. It’s not worth screwing around for that amount of money.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.
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
In order to have the umbrella, we had to take our auto limits to the max.+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.
I was carrying $2M until yesterday when Amica told me umbrella does not cover assets held in a trust. So I went back down to $1M.
I’ve only got a car at this point so seems prudent enough.
From my understanding, umbrella policies do cover assets in a revocable/living trust, but not in a irrevocable trust.
Apparently Amica does not. At least that's what the guy told me :/