Umbrella Insurance Worry

[Kings over Queens]

Made me look. My policy states it covers the first occurrence. Which based on the experience of a friend who had a claim and could not get a second policy, I guess I am out of luck if I have a second claim.

I'd be surprised if it says that.

Mine doesn't. Mine provides coverage per occurrence.

 

[engineernerd]

You might want to give your umbrella policy a second look. I’ve seen a $2M policy good for 2 incidents at $2M each.

Mine has $2M "each occurrence" and $4M "during the current policy period." Allstate.

I hope I'm not being charged too much for that extra $2M since the odds of having TWO events in a single year seem vanishingly small.

 

[Al18]

Kings over Queens,
I'm referring to Allstate NJ Umbrella coverage, which is winding down. Allstate NJ sent us a letter 18 months ago they would not renew Umbrella coverage or write any new Umbrella policies starting in 2026. I'm looking for a new insurance company.

 

[COcheesehead]

I'd be surprised if it says that.

Mine doesn't. Mine provides coverage per occurrence.

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[engineernerd]

Kings over Queens,
I'm referring to Allstate NJ Umbrella coverage, which is winding down. Allstate NJ sent us a letter 18 months ago they would not renew Umbrella coverage or write any new Umbrella policies starting in 2026. I'm looking for a new insurance company.

Wow, have you tried to find out why? Did NJ pass a law they didn't like, or are the reasons possibly relevant to other states (like mine)?

 

[Kings over Queens]

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And?

What that means is that the accident must take place during the policy period, and not before or after the policy period. It doesn't restrict coverage to only one claim (accident) but rather only those claims (accidents) that take place between effective and expiration date.

If you'd like to email me the policy, I can carve out the provisions.

Or, tell me which carrier and I'll try to find their policy form online.

 

[Kings over Queens]

Mine has $2M "each occurrence" and $4M "during the current policy period." Allstate.

I hope I'm not being charged too much for that extra $2M since the odds of having TWO events in a single year seem vanishingly small.

The way that is worded, you aren't getting extra coverage, but rather, less.

Typically you get a per occurrence limit for EACH claim during that policy period. In your case (Allstate's case) they are limiting their upward exposure to $4m. I've never seen that on a personal policy. Commercial, yes, all the time, but not personal.

 

[Kings over Queens]

Kings over Queens,
I'm referring to Allstate NJ Umbrella coverage, which is winding down. Allstate NJ sent us a letter 18 months ago they would not renew Umbrella coverage or write any new Umbrella policies starting in 2026. I'm looking for a new insurance company.

Wow.

Same as Engineeringnerd.

Allstate is a direct writer and I don't come across them much.

I'm very surprised to see an annual aggregate on a personal umbrella.

 

[COcheesehead]

And?

What that means is that the accident must take place during the policy period, and not before or after the policy period. It doesn't restrict coverage to only one claim (accident) but rather only those claims (accidents) that take place between effective and expiration date.

If you'd like to email me the policy, I can carve out the provisions.

Or, tell me which carrier and I'll try to find their policy form online.

I’ve got a good agent. I’ll talk to her.

 

[Buckeye]

The price of our $1 million umbrella policy just more than doubled. I had to go against my wife's wishes to renew it.

I just got my quote for a renewal in April from USAA and my premium for $1,000,000 in coverage went from $299 to $635, more than a 100% increase. Holy hell! Nothing has changed or happened that was caused by us that would drive this increase.

 

[COcheesehead]

Ours dropped by $50 year over year, but our entire insurance bill: home, auto, umbrella went up by about $100 in 2026.

 

[bgares]

I had a conversation about umbrella insurance with a rich friend recently. It's bothering me a little, and I wanted to bounce if off y'all. I'm kinda hoping this isn't how it works.

Me: "I heard that a $2M umbrella policy is large enough for almost anyone, because the insurance company will send their lawyers to fight to avoid paying out that much money, regardless of your portfolio size."

Friend: "That's bad advice. Let's say you cause a car accident where someone loses a finger, or a hand, or a leg. The legal world has somewhat pre-determined rates for such injuries, e.g. a hand is worth $5M**. If you have a $2M policy but caused a 'known' $5M injury, they won't fight it because they know it would be near impossible to get "a lost hand" down below $2M. So they write the $2M check and walk away. You're still on the hook for the remaining $3M."

Me: "So if I have $5M, then I should get a $5M umbrella?"

Friend: "Yes. I know this because I have a teenage daughter who caused a car accident where the other person got hurt."

Me: "But let's say I have $5M and I have a $5M umbrella. Under your scenario, I'm still at risk if I cause an accident (death?) that's 'known' to be worth $10M? They pay the $5M and walk away. I'll still be sued for the other half."

Friend: "Probably, yes. Well, you'd have to get your own lawyer to fight it."

** P.S. I don't actually remember if it was a *hand* that was worth $5M or $2M, or something else. I don't think it's important.

(I'm also wondering how lawyers can find out how much money I have. They might assume if I have a $5M umbrella policy, then I must have $5M.)

Anyone in the insurance industry please don’t be offended. Look around any major city and most of the skyscrapers are owned by insurance companies or their subsidiaries. I think we have adequate insurance. Our total worth is <$2 million we don’t have umbrella insurance. About 4 times in my life I could have sued someone and 4 times in my life I could have been sued. I never sued and have never been sued. Maybe I believe in karma.
I choose not to worry about these things in the twilight of my life. I am a person of faith and believe I and my family are protected from certain events. Let’s face it , insurance is necessary but based on our own fears!
Everyone have a good evening

 

[meleana]

I had raised ours to $2M a couple of yrs ago per FA advice. But then RLI raised the premium so much 2 yrs ago that I lowered our coverage back to $1M..

Umbrella insurance used to be fairly cheap. It’s gotten very expensive.

 

[Al18]

Blares,
You are assuming everyone abides by your moral values. I would not take that bet - I’m keeping my insurance.

 

[Kings over Queens]

Anyone in the insurance industry please don’t be offended. Look around any major city and most of the skyscrapers are owned by insurance companies or their subsidiaries. I think we have adequate insurance. Our total worth is <$2 million we don’t have umbrella insurance. About 4 times in my life I could have sued someone and 4 times in my life I could have been sued. I never sued and have never been sued. Maybe I believe in karma.
I choose not to worry about these things in the twilight of my life. I am a person of faith and believe I and my family are protected from certain events. Let’s face it , insurance is necessary but based on our own fears!
Everyone have a good evening

I had raised ours to $2M a couple of yrs ago per FA advice. But then RLI raised the premium so much 2 yrs ago that I lowered our coverage back to $1M..

Umbrella insurance used to be fairly cheap. It’s gotten very expensive.

Blares,
You are assuming everyone abides by your moral values. I would not take that bet - I’m keeping my insurance.

These three posts that I bolded sum how I advise people to purchase excess liability coverage.

You buy as much as you can afford, or as much that lets you sleep at night.

There is no mathematical equation to solve the "how much coverage do I need?"

 

[Buckeye]

I had raised ours to $2M a couple of yrs ago per FA advice. But then RLI raised the premium so much 2 yrs ago that I lowered our coverage back to $1M..

Umbrella insurance used to be fairly cheap. It’s gotten very expensive.

Which means it's getting used and the risk is real.

 

[Kings over Queens]

Which means it's getting used and the risk is real.

There are several comments in this thread as well as another on the topic of personal excess liability (umbrella) where carriers are no longer offering coverage, or attaching annual aggregates to their policies. This alone should give people pause as these actions point to issues in the marketplace.

When an insurance company doesn't want to sell you something, clearly, something is wrong.

 

[wallygator69]

you have to sign off on any personal injury settlement proposed by your insurance company.

they can't just cut a check and walk away leaving you holding the bag.

the insurance company lawyers are representing you so you don't have to hire your own attorney.

and IMHO your friend has never actually been involved in a PI case.

This must have changed

In 1989 I was responsible (black ice actually) for an accident with injuries to the other guys.

I did everything right with reporting insurance. After 3 months I called was told they were still working on settlement.

6 months later I got a letter from liberty biberty saying they settled for $50k (which was my liability coverage on policy). I called and said WTF. Was told it was done and I could be on the hook for another $50k if they came after me. They never did.

Dropped them and have never gone back.

Hope your right that this can't happen anymore.

Regards,

Wally

 

[Kings over Queens]

This must have changed

In 1989 I was responsible (black ice actually) for an accident with injuries to the other guys.

I did everything right with reporting insurance. After 3 months I called was told they were still working on settlement.

6 months later I got a letter from liberty biberty saying they settled for $50k (which was my liability coverage on policy). I called and said WTF. Was told it was done and I could be on the hook for another $50k if they came after me. They never did.

Dropped them and have never gone back.

Hope your right that this can't happen anymore.

Regards,

Wally

I'd have to check back to policies written in 1989, but today, the standard auto or home liability policy does not require your consent for the carrier to settle a claim, and a carrier can settle at any time. My experience is when they are offer policy limit, they will secure a release for the settlement in exchange, but I'm not sure that is required in law or just something done in practice.

Some professional liability policies have a consent to settle provision that requires the carrier to obtain consent. These are typically for lawyers, doctors and architects/engineers.

 

[yhoomajor]

Anyone in the insurance industry please don’t be offended. Look around any major city and most of the skyscrapers are owned by insurance companies or their subsidiaries. I think we have adequate insurance. Our total worth is <$2 million we don’t have umbrella insurance. About 4 times in my life I could have sued someone and 4 times in my life I could have been sued. I never sued and have never been sued. Maybe I believe in karma.
I choose not to worry about these things in the twilight of my life. I am a person of faith and believe I and my family are protected from certain events. Let’s face it , insurance is necessary but based on our own fears!
Everyone have a good evening

It's a self-fulfilling prophecy.
More people get Umbrella policies, more incentives for Ambulance-chasing lawyers to go after higher payouts. More that happens, higher the Umbrella policy premiums will be in future.

 

[Stormy Kromer]

These three posts that I bolded sum how I advise people to purchase excess liability coverage.

You buy as much as you can afford, or as much that lets you sleep at night.

There is no mathematical equation to solve the "how much coverage do I need?"

Best post on this thread