Author Topic: Anyone ever been sued for liability that exceeded your insurance coverage?  (Read 11787 times)

BlueMR2

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As a side note, "top of the line" aviation liability insurance coverage is 1 million smooth.  Most people can only get 100k per person, 1 million per incident (and standard umbrellas exclude aviation incidents).  You still don't hear of estates getting hit by lawsuits exceeding coverage despite the potentially larger claims for an aviation incident.

obstinate

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No, I dont. Call an independent broker. There are several companies that will write an umbrella policy without a backing auto policy. Off the top of my head, Chubb, USLI, and AIG all offer this. Most of the big d2c companies (esurance, geico, farmers) do not.

Any idea what is difference?  I would wildly guess you either pay a little extra to make up the difference or waive the rights to the insurance coverage based on an at-fault auto accident.  But I'm just as likely to be wrong with my guess as I am to be right.
You have to read all the legalese to find out exactly what the differences are. Oftentimes the liability coverage for boats and aircraft are different or not present.

MrSal

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I have with my homeowners insurance a $1 M liability... does that cover things like sueing? Or just things that happen in my house?

Honestly it seems silly to have $1M with a house worth 150k however when i quoted the insurance i think it only added like 10$ from not having at all to have 1M with my homeowners policy... so i went for it.

I have this:

Package - Cov E - Personal Liability
$1,000,000

And also they added complimentary :

Identity Fraud Expense
Reimburses the policyholder for certain expenses associated with identity theft, and may also come with personal assistance to victims of identity fraud. LESS-

$30,000
« Last Edit: March 19, 2017, 02:26:02 PM by MrSal »

Spork

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As a side note, "top of the line" aviation liability insurance coverage is 1 million smooth.  Most people can only get 100k per person, 1 million per incident (and standard umbrellas exclude aviation incidents).  You still don't hear of estates getting hit by lawsuits exceeding coverage despite the potentially larger claims for an aviation incident.

Isn't that because of the liability reform passed back in the 90s?  Prior to that, GA manufacturing had almost shut down altogether because of the exponential liability growth.  (That's also why the cockpit is littered with ridiculous warning placards.  "Do not walk into spinning propeller blade.  Injury may occur."
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BlueMR2

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As a side note, "top of the line" aviation liability insurance coverage is 1 million smooth.  Most people can only get 100k per person, 1 million per incident (and standard umbrellas exclude aviation incidents).  You still don't hear of estates getting hit by lawsuits exceeding coverage despite the potentially larger claims for an aviation incident.

Isn't that because of the liability reform passed back in the 90s?  Prior to that, GA manufacturing had almost shut down altogether because of the exponential liability growth.  (That's also why the cockpit is littered with ridiculous warning placards.  "Do not walk into spinning propeller blade.  Injury may occur."

My understanding is that the liability reform only shields the manufacturers.  The original issue was that manufacturers were getting hit with insane lawsuits due to someone crashing a plane.  To the point where it was no longer viable to build airplanes.  People were still flying them during that time, you just could not buy a new one (at any price).

merula

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An independent agent is YOUR advocate, not the carriers, and the least they can do is explain similar claims scenarios and raise questions on the claims-handling, and of course answer questions about limits and how the policy could respond, and the responsibilities of the carrier.

Say you file a claim and the carrier rejects (erroneously), what's your next move if you went through a website? How would you have any idea if the denial was valid?

I'm going to rag on anyone who chooses to forego competent advice to save a few bucks, and then gets no help when something goes wrong, especially when the product they bought was to cover for something that went wrong! lol

Nope. An independent agent is an agent with contracts with multiple insurance carriers. They are still the carrier's AGENT, and they get paid by the carrier as a percentage of the premium. So an independent agent's financial interests are aligned with the carrier's and not the policyholder's.

If you want insurance advice from someone who is NOT a party to the transaction, you want a fee-based broker or consultant. But that's not a matter of "saving a few bucks"; they typically have minimum fees in excess of the total amount the average individual pays for insurance annually.

If you go through a direct writer or an internet carrier and have a dispute, your next move is an attorney. As long as you're factoring that potential cost into the comparison, more power to you.

merula

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Merula, I had not come back and seen your reply until now.

I'd be happy to provide more details to help you understand where this makes no sense to you.  Please provide some questions I can answer.

The challenge here was that the suit was for a home that I had sold and was no longer in, therefore was not currently covered by my CURRENT homeowner's policy.

caracarn, I'm sorry that there's confusion here. Like I mentioned before, insurance often hangs on something so minute that it doesn't seem relevant, and that could be a million different things. It's not worth you and I going through 20 questions to figure that out; I just don't want other people to think that the facts you've presents are indicative of how umbrella policies work. Because, objectively, they're not. They worked that way in your situation because of some fact that's missing, and that you may not even know or realize made all the difference.

Liability in a homeowner's policy is not typically tied to your liability as a homeowner specifically, so that it wasn't your current home shouldn't make a difference unless there's some quirk particular to your policy.

merula

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No, I dont. Call an independent broker. There are several companies that will write an umbrella policy without a backing auto policy. Off the top of my head, Chubb, USLI, and AIG all offer this. Most of the big d2c companies (esurance, geico, farmers) do not.

Any idea what is difference?  I would wildly guess you either pay a little extra to make up the difference or waive the rights to the insurance coverage based on an at-fault auto accident.  But I'm just as likely to be wrong with my guess as I am to be right.

Umbrella claims most often come from auto, less so from other liability types. This is true both in personal and commercial umbrellas.

If the carrier writes the primary auto and liability (generally homeowners/renters for personal), writing the umbrella is very very easy. They just need to contemplate the increased limit. Writing over another carrier's primary auto/liability is more difficult in two ways: first, you need to understand all of the risk of the primary (vehicles, drivers, MVR results, etc) AND you need to understand what coverage differences exist between the underlying carrier's coverage form and your umbrella form.

For example, let's say Carrier A has a policy exclusion that says that accidents that occur on Tuesday aren't covered. If Carrier A writes an umbrella over that auto policy, they're going to make sure that the umbrella also says that Tuesday accidents aren't covered.

But if you buy the auto from Carrier A and the umbrella from Carrier B, B then needs to read Carrier A's policy, find that Tuesday exclusion and make sure their policy says the same thing. Otherwise, they're probably paying ALL claims on Tuesdays, not just those that exceed the primary limit.

That added layer of difficulty is why not as many carriers write "unsupported" umbrellas. CHUBB is the king of them though.

merula

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What is a sufficient amount of uninsured motorist coverage? I currently have $50k/$100k for UIM personal injury.

UM/UIM coverage protects YOU from damage caused by people who can't pay. Your liability limit protects other people from damage you cause.

Is your potential damage worth as much to you as other people's damage? Probably, right? So, you probably want to buy a UM/UIM limit equal to your liability limit.

nawhite

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What is a sufficient amount of uninsured motorist coverage? I currently have $50k/$100k for UIM personal injury.

UM/UIM coverage protects YOU from damage caused by people who can't pay. Your liability limit protects other people from damage you cause.

Is your potential damage worth as much to you as other people's damage? Probably, right? So, you probably want to buy a UM/UIM limit equal to your liability limit.

I'm not at all a fan of uninsured motorist insurance and your advice just seems wrong especially if you don't have comprehensive and collision coverage (common for people with cheap used cars).

If you get hit by someone without insurance, your disability and health insurance (and maybe life insurance if you're really unlucky) cover you and your family. If you don't have comprehensive and collision, then Uninsured motorist coverage is only going to also cover your health insurance deductibles. If you didn't have it, everything else would be covered already. That is the only difference between having it and not. If you do have comprehensive and collision, the uninsured motorist coverage would also pay for your car.

So the absolute maximum I would carry with uninsured motorist coverage (assuming I didn't have comprehensive and collision) would be the health insurance deductibles for every passenger in your car. 5 people times $6k = $30k.
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BabyShark

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What is a sufficient amount of uninsured motorist coverage? I currently have $50k/$100k for UIM personal injury.

UM/UIM coverage protects YOU from damage caused by people who can't pay. Your liability limit protects other people from damage you cause.

Is your potential damage worth as much to you as other people's damage? Probably, right? So, you probably want to buy a UM/UIM limit equal to your liability limit.

I'm not at all a fan of uninsured motorist insurance and your advice just seems wrong especially if you don't have comprehensive and collision coverage (common for people with cheap used cars).

If you get hit by someone without insurance, your disability and health insurance (and maybe life insurance if you're really unlucky) cover you and your family. If you don't have comprehensive and collision, then Uninsured motorist coverage is only going to also cover your health insurance deductibles. If you didn't have it, everything else would be covered already. That is the only difference between having it and not. If you do have comprehensive and collision, the uninsured motorist coverage would also pay for your car.

So the absolute maximum I would carry with uninsured motorist coverage (assuming I didn't have comprehensive and collision) would be the health insurance deductibles for every passenger in your car. 5 people times $6k = $30k.

UM/UIM is not just to cover deductibles.  Merula is right that it protects you and (and your passengers) from damage caused by people who don't have enough insurance.  Health insurance and disability insurance is not always going to cover everything and I wouldn't recommend trying to fight with insurance companies to get your treatment while you're also out of work and recovering from a serious injury.  Health insurance and disability insurance isn't going to take into account your pain and suffering, mental anguish, and all the intangibles that come with being in a car wreck.  You can disagree with the ability to recover compensation for such things when they're caused by the fault of another, but that's the system we have in place, and when there isn't enough insurance, it's terrible.

How auto insurance works varies from state to state in what it covers but to say that UIM is only going to cover your health insurance deductible is wrong.

ETA: and if you want more UM/UIM coverage to protect yourself, you may be required to have at least as much liability coverage.  I can only speak for Virginia, but for my auto personal policy, I can't have more UM/UIM coverage than I have liability.
« Last Edit: March 20, 2017, 10:03:54 PM by BabyShark »

Goldielocks

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No, I dont. Call an independent broker. There are several companies that will write an umbrella policy without a backing auto policy. Off the top of my head, Chubb, USLI, and AIG all offer this. Most of the big d2c companies (esurance, geico, farmers) do not.

Any idea what is difference?  I would wildly guess you either pay a little extra to make up the difference or waive the rights to the insurance coverage based on an at-fault auto accident.  But I'm just as likely to be wrong with my guess as I am to be right.

Umbrella claims most often come from auto, less so from other liability types. This is true both in personal and commercial umbrellas.

If the carrier writes the primary auto and liability (generally homeowners/renters for personal), writing the umbrella is very very easy. They just need to contemplate the increased limit. Writing over another carrier's primary auto/liability is more difficult in two ways: first, you need to understand all of the risk of the primary (vehicles, drivers, MVR results, etc) AND you need to understand what coverage differences exist between the underlying carrier's coverage form and your umbrella form.

For example, let's say Carrier A has a policy exclusion that says that accidents that occur on Tuesday aren't covered. If Carrier A writes an umbrella over that auto policy, they're going to make sure that the umbrella also says that Tuesday accidents aren't covered.

But if you buy the auto from Carrier A and the umbrella from Carrier B, B then needs to read Carrier A's policy, find that Tuesday exclusion and make sure their policy says the same thing. Otherwise, they're probably paying ALL claims on Tuesdays, not just those that exceed the primary limit.

That added layer of difficulty is why not as many carriers write "unsupported" umbrellas. CHUBB is the king of them though.
Awesome post, merula.

merula

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Thank you Babyshark, you are absolutely right.

I have a family member who has a recurring medical condition that is often caused by either auto or workplace accidents. However, his is not, just bad luck. Once every few months, his health insurance sends him a form to complete in which he has to say that it wasn't an auto or workplace accident. This has been going on for over a decade. I can't even imagine what a hassle it'd be to have to answer each of those "yes, it's an auto accident, but the limits are exhausted".

And you can't know that every passenger you'll ever carry will have health insurance, nor what their deductible will be.

Thanks, Goldielocks. That one was easy; I basically described why I have a job. :)

Clean Shaven

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What is a sufficient amount of uninsured motorist coverage? I currently have $50k/$100k for UIM personal injury.

UM/UIM coverage protects YOU from damage caused by people who can't pay. Your liability limit protects other people from damage you cause.

Is your potential damage worth as much to you as other people's damage? Probably, right? So, you probably want to buy a UM/UIM limit equal to your liability limit.

I'm not at all a fan of uninsured motorist insurance and your advice just seems wrong especially if you don't have comprehensive and collision coverage (common for people with cheap used cars).

If you get hit by someone without insurance, your disability and health insurance (and maybe life insurance if you're really unlucky) cover you and your family. If you don't have comprehensive and collision, then Uninsured motorist coverage is only going to also cover your health insurance deductibles. If you didn't have it, everything else would be covered already. That is the only difference between having it and not. If you do have comprehensive and collision, the uninsured motorist coverage would also pay for your car.

So the absolute maximum I would carry with uninsured motorist coverage (assuming I didn't have comprehensive and collision) would be the health insurance deductibles for every passenger in your car. 5 people times $6k = $30k.

UM/UIM is absolutely critical insurance, IMHO. nawhite's interpretation of its use is not accurate. Here's why.

UM /UIM covers you in the event that another driver without sufficient coverage causes you a loss in an accident. It covers you to the extent of your UM/UIM limits, even if that other driver has pathetic limits (in my state, minimum is 15/30, which is pathetic). It essentially stands in place of the other driver's liability coverage.

Relying on your comp or collision and health insurance is not a suitable replacement for UM/UIM. Comp and collision cover damage to property (your car), not bodily injury. Health insurance covers your medical bills - or at least some of them, not your deductible or copay. You still have your wage loss, disability, pain and suffering components to address. Maybe you have some other insurance that covers some of these things. Refusing to get UM/UIM is a penny wise, pound foolish approach.

I have 250/500 liability and the same for UM/UIM, with a 1MM umbrella. The umbrella does not provide UM/UIM coverage - I am not aware of any that do.




BabyShark

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What is a sufficient amount of uninsured motorist coverage? I currently have $50k/$100k for UIM personal injury.

UM/UIM coverage protects YOU from damage caused by people who can't pay. Your liability limit protects other people from damage you cause.

Is your potential damage worth as much to you as other people's damage? Probably, right? So, you probably want to buy a UM/UIM limit equal to your liability limit.

I'm not at all a fan of uninsured motorist insurance and your advice just seems wrong especially if you don't have comprehensive and collision coverage (common for people with cheap used cars).

If you get hit by someone without insurance, your disability and health insurance (and maybe life insurance if you're really unlucky) cover you and your family. If you don't have comprehensive and collision, then Uninsured motorist coverage is only going to also cover your health insurance deductibles. If you didn't have it, everything else would be covered already. That is the only difference between having it and not. If you do have comprehensive and collision, the uninsured motorist coverage would also pay for your car.

So the absolute maximum I would carry with uninsured motorist coverage (assuming I didn't have comprehensive and collision) would be the health insurance deductibles for every passenger in your car. 5 people times $6k = $30k.

UM/UIM is absolutely critical insurance, IMHO. nawhite's interpretation of its use is not accurate. Here's why.

UM /UIM covers you in the event that another driver without sufficient coverage causes you a loss in an accident. It covers you to the extent of your UM/UIM limits, even if that other driver has pathetic limits (in my state, minimum is 15/30, which is pathetic). It essentially stands in place of the other driver's liability coverage.

Relying on your comp or collision and health insurance is not a suitable replacement for UM/UIM. Comp and collision cover damage to property (your car), not bodily injury. Health insurance covers your medical bills - or at least some of them, not your deductible or copay. You still have your wage loss, disability, pain and suffering components to address. Maybe you have some other insurance that covers some of these things. Refusing to get UM/UIM is a penny wise, pound foolish approach.

I have 250/500 liability and the same for UM/UIM, with a 1MM umbrella. The umbrella does not provide UM/UIM coverage - I am not aware of any that do.





Thank you Clean Shaven that's essentially what I was trying to say but it was late last night when I was writing it.

Umbrellas can provide UM/UIM coverage, I have one here in Virginia.  It's because I had $500k/$1mm liability/um/uim with my old carrier and my new carrier would only write me a $500k single limit auto policy for whatever reason.  I wouldn't switch to them unless they could also write me an umbrella with UIM because my husband and I are often in the car together and a $500k single limit UIM doesn't provide enough for us in my opinion.

I hope we never need these policies but I'm never going to regret having them, even if they do cost me more at the end of the day.

It's also often not as expensive as one thinks to increase your coverage.  Insurance premiums are based on the risk that you'll actually have to use the policy.  It's a lot less likely that you'll need that $100k coverage, so they don't charge that much more to change it from $50k to $100k.

I'm weirdly passionate about people having enough auto insurance to protect themselves and I see every day people who believe they have "full coverage" and then find out there just isn't enough money to compensate for what happened.

merula

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I have 250/500 liability and the same for UM/UIM, with a 1MM umbrella. The umbrella does not provide UM/UIM coverage - I am not aware of any that do.

Umbrellas can provide UM/UIM coverage, I have one here in Virginia.  It's because I had $500k/$1mm liability/um/uim with my old carrier and my new carrier would only write me a $500k single limit auto policy for whatever reason.  I wouldn't switch to them unless they could also write me an umbrella with UIM because my husband and I are often in the car together and a $500k single limit UIM doesn't provide enough for us in my opinion.

Here's where my commercial insurance bias is a problem. On the commercial insurance side, excess UM/UIM is only required to be offered in the Umbrella in 5 states, and Virginia isn't one of those. My carrier and the other commercial carriers I know about won't even offer the excess except where it's required. The major reason is that for commercial risks, the underlying Auto policy needs to be at least $1,000,000 limit before we'll write the Umbrella, and $1,000,000 UM/UIM would be extremely high, especially considering that auto injuries to an employee are often WC.

But BabyShark does have excess UM/UIM limits. So either the requirements are different for personal insurance or there are carriers who will offer it without a legal requirement. (Or both.) My research isn't turning up any details either way.

step-in-time

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^ In my state, UM/UIM is sold either as an optional upgrade from a standard umbrella policy (most companies I checked with for quotes it was ~$100/yr more for the UM/UIM option on a $1M umbrella) or else UM/UIM was included as a standard coverage on the umbrella policy (USAA). Interesting this varies so much.

Clean Shaven

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Interesting.  Thanks for the input on the umbrella UM/UIM -- I haven't really shopped it since starting an umbrella policy about 10 years ago, and at that time, I couldn't find anything that would provide UM/UIM.

My insurance shopping seems to start + end with inquiries into other auto carriers.  In my (personal, anecdotal) experience as an insurance shopper, I end up getting auto quotes that are $500-800 higher per year than my existing carrier, and I stop asking at that point.  Homeowner quotes are comparable to my existing carrier, but the auto policy being so much higher basically makes it a non-starter for me.

I'll revisit the world of insurance shopping this fall, after the last kid moves out of the house for college.  We're going to move him onto his own auto policy, which will significantly decrease our insurance rates.  Teenage driver meant that our auto increased nearly 3X, umbrella increased $60ish, and that was with the clean record/ driver training/ good grades discounts. 

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What is a sufficient amount of uninsured motorist coverage? I currently have $50k/$100k for UIM personal injury.

UM/UIM coverage protects YOU from damage caused by people who can't pay. Your liability limit protects other people from damage you cause.

Is your potential damage worth as much to you as other people's damage? Probably, right? So, you probably want to buy a UM/UIM limit equal to your liability limit.

I'm not at all a fan of uninsured motorist insurance and your advice just seems wrong especially if you don't have comprehensive and collision coverage (common for people with cheap used cars).

If you get hit by someone without insurance, your disability and health insurance (and maybe life insurance if you're really unlucky) cover you and your family. If you don't have comprehensive and collision, then Uninsured motorist coverage is only going to also cover your health insurance deductibles. If you didn't have it, everything else would be covered already. That is the only difference between having it and not. If you do have comprehensive and collision, the uninsured motorist coverage would also pay for your car.

So the absolute maximum I would carry with uninsured motorist coverage (assuming I didn't have comprehensive and collision) would be the health insurance deductibles for every passenger in your car. 5 people times $6k = $30k.

UM/UIM is absolutely critical insurance, IMHO. nawhite's interpretation of its use is not accurate. Here's why.

UM /UIM covers you in the event that another driver without sufficient coverage causes you a loss in an accident. It covers you to the extent of your UM/UIM limits, even if that other driver has pathetic limits (in my state, minimum is 15/30, which is pathetic). It essentially stands in place of the other driver's liability coverage.

Relying on your comp or collision and health insurance is not a suitable replacement for UM/UIM. Comp and collision cover damage to property (your car), not bodily injury. Health insurance covers your medical bills - or at least some of them, not your deductible or copay. You still have your wage loss, disability, pain and suffering components to address. Maybe you have some other insurance that covers some of these things. Refusing to get UM/UIM is a penny wise, pound foolish approach.

I have 250/500 liability and the same for UM/UIM, with a 1MM umbrella. The umbrella does not provide UM/UIM coverage - I am not aware of any that do.





Thank you Clean Shaven that's essentially what I was trying to say but it was late last night when I was writing it.

Umbrellas can provide UM/UIM coverage, I have one here in Virginia.  It's because I had $500k/$1mm liability/um/uim with my old carrier and my new carrier would only write me a $500k single limit auto policy for whatever reason.  I wouldn't switch to them unless they could also write me an umbrella with UIM because my husband and I are often in the car together and a $500k single limit UIM doesn't provide enough for us in my opinion.

I hope we never need these policies but I'm never going to regret having them, even if they do cost me more at the end of the day.

It's also often not as expensive as one thinks to increase your coverage.  Insurance premiums are based on the risk that you'll actually have to use the policy.  It's a lot less likely that you'll need that $100k coverage, so they don't charge that much more to change it from $50k to $100k.

I'm weirdly passionate about people having enough auto insurance to protect themselves and I see every day people who believe they have "full coverage" and then find out there just isn't enough money to compensate for what happened.

I think you are all putting words in my mouth. I'm using the example of if you don't have any comprehensive or collision insurance but you do have disability, health and life insurance.

While driving, I am rear-ended by someone without insurance and get a concussion and break my wrist. My car is totaled.

If I don't have UIM coverage, my health insurance covers my medical bills (minus deductible) and my disability covers any expenses related to loss of work. Since I didn't have C&C coverage, I get nothing for the car. My total expenses are 1) the cost of buying another car, 2) my health insurance deductibles. Probably $10k total.

If I do have UIM coverage, all of my medical bills, up to my UIM limit, are covered by UIM and past that limit I pay my health insurance deductible and then health insurance covers the rest. My car still isn't covered since I didn't have C&C coverage even if I did have UIM coverage.  My total expenses are 1) the cost of buying another car. If my medical expenses exceed my UIM coverage I'll need to pay my health insurance deductible anyway. So $4k if the medical expenses are low and $10k if they are high.

So having UIM coverage only saves me $6000 out of pocket and only if my medical expenses are less than my UIM limits. That's it!

Health insurance doesn't magically stop working just because you were injured in a car. And as long as ACA is still in place, there are no lifetime limits. It's like having an unlimited coverage amount. Given how much I pay for health insurance, I don't see the reason to pay for something else that covers the same thing.
« Last Edit: March 21, 2017, 12:05:17 PM by nawhite »
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Clean Shaven

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I think you are all putting words in my mouth. I'm using the example of if you don't have any comprehensive or collision insurance but you do have disability, health and life insurance.

While driving, I am rear-ended by someone without insurance and get a concussion and break my wrist. My car is totaled.

If I do have UIM coverage, all of my medical bills, up to my UIM limit, are covered by UIM and past that limit I pay my health insurance deductible and then health insurance covers the rest. My car still isn't covered since I didn't have C&C coverage even if I did have UIM coverage.  My total expenses are 1) the cost of buying another car. If my medical expenses exceed my UIM coverage I'll need to pay my health insurance deductible anyway. So $4k if the medical expenses are low and $10k if they are high.

So having UIM coverage only saves me $6000 out of pocket and only if my medical expenses are less than my UIM limits. That's it!

^^ This is where there is some misunderstanding, I think, with what I wrote.

Comp and collision coverage have nothing to do with UM/UIM.  UM/UIM is liability coverage that protects the insured (in this hypothetical, nawhite is the insured) when the other, at-fault driver lacks coverage sufficient to protect the not-at-fault insured.  In this hypothetical, because the other, at-fault driver had no insurance, nawhite would be covered by his own UM/UIM for all losses caused by the at-fault driver, to the full limits of nawhite's UM/UIM coverage.  These losses include damage or loss of nawhite's automobile, even if nawhite does not have comp or collision coverage.

Comprehensive coverage covers damage to the vehicle that is not the result of a collision.  Examples include vandalism or a tree limb falling on the car.

Collision coverage covers damage to the vehicle that is the result of the vehicle striking something else while being driven.  Example:  backing the car into a post.

UM/UIM coverage does not extend or supplement comp or collision.  They are separate.
« Last Edit: March 21, 2017, 12:16:37 PM by Clean Shaven »

BabyShark

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Re: Umbrellas, I definitely see personal and commercial policies being very different so that makes a lot of sense.  They weren't offering me an umbrella with UM/UIM, I really had to push for it and it was realistically the only way they were getting my business so they were willing to write me one. 

Health Insurance/Disability Insurance/Life Insurance isn't going to cover your pain and suffering, mental anguish, inconvenience, etc. that all come from being in an accident.  If you get a concussion and you break your wrist, there are more things that come with that than medical bills.  You're possibly looking at a lifetime injury to your wrist, maybe even a major brain injury from which you never really recover.  There's a lot of push back on receiving money for those injuries but it's the system we've created to compensate people who have been hurt through no fault of their own.  If you're ever badly hurt in a car crash, you're going to be glad there is enough insurance to compensate for your injuries.  It's not a perfect system but it's what we have. It's heartbreaking when somebody is badly injured and there just isn't enough money to go around because people just don't carry enough insurance.

I'm probably a little biased because I see this every day, and while spending a little more on insurance isn't the most mustachian thing at the outset, you better believe you're thankful for it if you ever need it.

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I keep hearing that lawyers will check a person's assets first to see if they are worth sueing. Is there any way to appear to be a poor person to avoid lawsuits? I own properties and that is public record but they could be shifted to an LLC or something like that. How can a lawyer find out the balance of my Vanguard account? My brother is a lawyer and I asked him this but didn't get a straight answer.

Well, you can practice "stealth wealth" to discourage people from looking into your assets. That is, drive an old beater and live in a "bad" part of town and people will assume that you don't have assets without really looking. Or, you can set up a complicated shell game of LLCs and subsidiaries, but that will likely cost you more than any potential benefit from a lawsuit you may or may not ever actually face.

I disagree that LLC protection is complicated or necessarily expensive.  Use a real estate lawyer or title company to transfer your properties to one or more LLCs that you form or have formed in states with strong privacy laws for shareholders (Delaware, Nevada, Wyoming are the big three).  Tada, the equity in your properties is shielded from a lawyer poking around to see if you are worth pursuing in connection to a frivolous lawsuit.  Potential costs include real estate transfer costs in your area, lawyer/title company costs for the LLC formation and property transfer, yearly LLC fees and your personal benefit/risks analysis of a due on sale clause being triggered on a property if there is a mortgage loan held in your personal name. 

Personally, in my area LLC annual registration fees are $50/year for each LLC, there is no real estate transfer tax and due on sale clauses appear to be as common (and as talked about) as white whales so LLCs are an additional useful piece of asset protection for me at low cost.  But if you live in an area with a 2% transfer tax or California with its $800-$12.5k yearly LLC fees, it may not be for you.

Agreed.  As someone who owns a quad-plex rental, I transferred the ownership of the property to an LLC.  It cost very little and the tax filing is very easy (simple pass-through entity).  Things could get expensive if someone falls off the deck or down the stairs.  Even with property insurance, I'm not taking that chance.

CDP45

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An independent agent is YOUR advocate, not the carriers, and the least they can do is explain similar claims scenarios and raise questions on the claims-handling, and of course answer questions about limits and how the policy could respond, and the responsibilities of the carrier.

Say you file a claim and the carrier rejects (erroneously), what's your next move if you went through a website? How would you have any idea if the denial was valid?

I'm going to rag on anyone who chooses to forego competent advice to save a few bucks, and then gets no help when something goes wrong, especially when the product they bought was to cover for something that went wrong! lol

Nope. An independent agent is an agent with contracts with multiple insurance carriers. They are still the carrier's AGENT, and they get paid by the carrier as a percentage of the premium. So an independent agent's financial interests are aligned with the carrier's and not the policyholder's.

If you want insurance advice from someone who is NOT a party to the transaction, you want a fee-based broker or consultant. But that's not a matter of "saving a few bucks"; they typically have minimum fees in excess of the total amount the average individual pays for insurance annually.

If you go through a direct writer or an internet carrier and have a dispute, your next move is an attorney. As long as you're factoring that potential cost into the comparison, more power to you.

Yes many independent agents earn commissions, but as you noted there are also direct fee services, but they still are the agent of the carrier even when on a fee basis (even with your implication the financial interest is aligned.) They are an agent of the carrier to be able to make material transactions, not to solely represent the interests of the carrier.

Because they are usually always aligned as an Independent. Otherwise it's like saying all the employees of a grocery store are employees of Pepsi because they sell Pepsi in the store. Plus, they can't be employees or financially bound to ALL the carriers because the carriers have competing interests, so almost by definition the independent agent needs to make the best judgment on what product to sell and sell the one best suited to their customer else open themselves up for Errors and Omissions claims.

They are employees of an independent business with the responsibility to represent their client, as also established by judicial precedent.

The problem with direct carriers is many time you wouldn't know if you should have had coverage, so do you ask an attorney to review everytime you may think you have a covered loss? Or would a better solution just be to go with an independent agent?

Blonde Lawyer

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    • My Student Loan Refi Story


What is a sufficient amount of uninsured motorist coverage? I currently have $50k/$100k for UIM personal injury.

UM/UIM coverage protects YOU from damage caused by people who can't pay. Your liability limit protects other people from damage you cause.

Is your potential damage worth as much to you as other people's damage? Probably, right? So, you probably want to buy a UM/UIM limit equal to your liability limit.

I'm not at all a fan of uninsured motorist insurance and your advice just seems wrong especially if you don't have comprehensive and collision coverage (common for people with cheap used cars).

If you get hit by someone without insurance, your disability and health insurance (and maybe life insurance if you're really unlucky) cover you and your family. If you don't have comprehensive and collision, then Uninsured motorist coverage is only going to also cover your health insurance deductibles. If you didn't have it, everything else would be covered already. That is the only difference between having it and not. If you do have comprehensive and collision, the uninsured motorist coverage would also pay for your car.

So the absolute maximum I would carry with uninsured motorist coverage (assuming I didn't have comprehensive and collision) would be the health insurance deductibles for every passenger in your car. 5 people times $6k = $30k.

UM/UIM is absolutely critical insurance, IMHO. nawhite's interpretation of its use is not accurate. Here's why.

UM /UIM covers you in the event that another driver without sufficient coverage causes you a loss in an accident. It covers you to the extent of your UM/UIM limits, even if that other driver has pathetic limits (in my state, minimum is 15/30, which is pathetic). It essentially stands in place of the other driver's liability coverage.

Relying on your comp or collision and health insurance is not a suitable replacement for UM/UIM. Comp and collision cover damage to property (your car), not bodily injury. Health insurance covers your medical bills - or at least some of them, not your deductible or copay. You still have your wage loss, disability, pain and suffering components to address. Maybe you have some other insurance that covers some of these things. Refusing to get UM/UIM is a penny wise, pound foolish approach.

I have 250/500 liability and the same for UM/UIM, with a 1MM umbrella. The umbrella does not provide UM/UIM coverage - I am not aware of any that do.





Thank you Clean Shaven that's essentially what I was trying to say but it was late last night when I was writing it.

Umbrellas can provide UM/UIM coverage, I have one here in Virginia.  It's because I had $500k/$1mm liability/um/uim with my old carrier and my new carrier would only write me a $500k single limit auto policy for whatever reason.  I wouldn't switch to them unless they could also write me an umbrella with UIM because my husband and I are often in the car together and a $500k single limit UIM doesn't provide enough for us in my opinion.

I hope we never need these policies but I'm never going to regret having them, even if they do cost me more at the end of the day.

It's also often not as expensive as one thinks to increase your coverage.  Insurance premiums are based on the risk that you'll actually have to use the policy.  It's a lot less likely that you'll need that $100k coverage, so they don't charge that much more to change it from $50k to $100k.

I'm weirdly passionate about people having enough auto insurance to protect themselves and I see every day people who believe they have "full coverage" and then find out there just isn't enough money to compensate for what happened.

I think you are all putting words in my mouth. I'm using the example of if you don't have any comprehensive or collision insurance but you do have disability, health and life insurance.

While driving, I am rear-ended by someone without insurance and get a concussion and break my wrist. My car is totaled.

If I don't have UIM coverage, my health insurance covers my medical bills (minus deductible) and my disability covers any expenses related to loss of work. Since I didn't have C&C coverage, I get nothing for the car. My total expenses are 1) the cost of buying another car, 2) my health insurance deductibles. Probably $10k total.

If I do have UIM coverage, all of my medical bills, up to my UIM limit, are covered by UIM and past that limit I pay my health insurance deductible and then health insurance covers the rest. My car still isn't covered since I didn't have C&C coverage even if I did have UIM coverage.  My total expenses are 1) the cost of buying another car. If my medical expenses exceed my UIM coverage I'll need to pay my health insurance deductible anyway. So $4k if the medical expenses are low and $10k if they are high.

So having UIM coverage only saves me $6000 out of pocket and only if my medical expenses are less than my UIM limits. That's it!

Health insurance doesn't magically stop working just because you were injured in a car. And as long as ACA is still in place, there are no lifetime limits. It's like having an unlimited coverage amount. Given how much I pay for health insurance, I don't see the reason to pay for something else that covers the same thing.

You are missing the true value of a claim.  Your UIM steps into the shoes of the liable party.  If you are hit and break your wrist and get a concussion you might have $15,000 in medical bills.  Your case, when you include your pain and suffering, loss of enjoyment of life and all that extra stuff is really worth $45,000+.  Your health/disability/life policies aren't going to cover those other damages.  You also get to claim your full medical bills (what the doctor actually charges) in your case but you only pay back your insurance what they actually paid the doc, less 1/3rd to share in your legal bills.  So, you might pay back your health insurance $10k of that $15k.  So, you pay your lawyer $15k, you pay health insurance $10k and you walk away with $20,000 because you had UIM.

merula

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Yes many independent agents earn commissions, but as you noted there are also direct fee services, but they still are the agent of the carrier even when on a fee basis (even with your implication the financial interest is aligned.) They are an agent of the carrier to be able to make material transactions, not to solely represent the interests of the carrier.

Because they are usually always aligned as an Independent. Otherwise it's like saying all the employees of a grocery store are employees of Pepsi because they sell Pepsi in the store. Plus, they can't be employees or financially bound to ALL the carriers because the carriers have competing interests, so almost by definition the independent agent needs to make the best judgment on what product to sell and sell the one best suited to their customer else open themselves up for Errors and Omissions claims.

They are employees of an independent business with the responsibility to represent their client, as also established by judicial precedent.

The problem with direct carriers is many time you wouldn't know if you should have had coverage, so do you ask an attorney to review everytime you may think you have a covered loss? Or would a better solution just be to go with an independent agent?

https://www.thebalance.com/agents-versus-brokers-and-how-they-make-money-462383

Insurance brokers represent YOU in the transaction. Agents represent the company.

Using your Pepsi comparison, the grocery store (agent) has contracts with multiple soda companies (carriers) and offers all of their products on their shelves. If Pepsi pays the store a 15% commission on all sales, plus a $1,000,000 bonus for selling more than $10,000,000, while Coke pays 10% with no bonus, you better believe Pepsi is getting all the endcaps.

In this scenario, a broker is one of those home-delivery shopping services. You tell them what you need, they go get it for you, but they DO NOT have any contract with any soda company.

shawndoggy

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nawhite you might want to double check your disability coverage.  I've never seen a disability policy that started paying on day 1.  Rather it's usually a disability that keeps you from working for more than 90 days.  So there's no coverage at all for the first 90 days of your disability.

In addition, just to harp on what others have already pointed out, your analysis overlooks that you may actually suffer a long term or permanent injury for which you would otherwise be entitled to compensation.  Lose an eye in a car wreck?  Sure, your insurance will cover the costs of stitching that hole in your face up (after deductible), but your insurance isn't going to pay you for a lifetime of disability.

CDP45

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Yes many independent agents earn commissions, but as you noted there are also direct fee services, but they still are the agent of the carrier even when on a fee basis (even with your implication the financial interest is aligned.) They are an agent of the carrier to be able to make material transactions, not to solely represent the interests of the carrier.

Because they are usually always aligned as an Independent. Otherwise it's like saying all the employees of a grocery store are employees of Pepsi because they sell Pepsi in the store. Plus, they can't be employees or financially bound to ALL the carriers because the carriers have competing interests, so almost by definition the independent agent needs to make the best judgment on what product to sell and sell the one best suited to their customer else open themselves up for Errors and Omissions claims.

They are employees of an independent business with the responsibility to represent their client, as also established by judicial precedent.

The problem with direct carriers is many time you wouldn't know if you should have had coverage, so do you ask an attorney to review everytime you may think you have a covered loss? Or would a better solution just be to go with an independent agent?

https://www.thebalance.com/agents-versus-brokers-and-how-they-make-money-462383

Insurance brokers represent YOU in the transaction. Agents represent the company.

Using your Pepsi comparison, the grocery store (agent) has contracts with multiple soda companies (carriers) and offers all of their products on their shelves. If Pepsi pays the store a 15% commission on all sales, plus a $1,000,000 bonus for selling more than $10,000,000, while Coke pays 10% with no bonus, you better believe Pepsi is getting all the endcaps.

In this scenario, a broker is one of those home-delivery shopping services. You tell them what you need, they go get it for you, but they DO NOT have any contract with any soda company.

How can you tell a broker what you need? Think most people know about the exclusions for flood and earthquake in most homeowners policies? Or that Uber driving is excluded?

You can't draw a line between the words agent and broker and who they represent, even in the article you linked it says all agents have a duty to the customer per state license regulations, and as I've mentioned also case precedent.

Also, most independent agencies have both agent and broker contracts with different carriers- I doubt there is a solely broker-only business because agency is about authority to change the contact and bind it, not being an advocate for the carriers.  Independent insurance agents represent YOU the customer, and they are the customers' advocate.

Note this does NOT apply to captive employees of carriers.