Author Topic: Umbrella insurance  (Read 14953 times)

icefr

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Umbrella insurance
« on: February 25, 2013, 12:16:56 PM »
My dad convinced me a couple of years ago that I should get an umbrella insurance policy. He owns a business, so his liability is a bit different than mine, I think. So now I'm wondering if I really need one.

* I have the maximum liability on my auto insurance policy ($250,000/$500,000).
* I currently have an umbrella policy with $2 million in liability. This costs $346/year and will go down to $266/year starting in mid-2014.

* I live in the US.
* I own my condo (with a mortgage).
* My assets total about $230,000. My condo is valued in the mid to high $300s and is included in the assets = monetary assets + condo purchase price - mortgage.
* I own a 2011 model car outright.
* I am 24.
* I have now grossed ~> $100,000 three years in a row and should hit that this year as well.

I think my dad's concern was that someone could sue me based on both my assets and my future earnings.

Does anyone have much experience with umbrella insurance policies? Is this worth me continuing to pay for?
« Last Edit: February 25, 2013, 01:06:43 PM by icefr »

momo

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Re: Umbrella insurance
« Reply #1 on: February 25, 2013, 01:04:07 PM »
Sounds like your net worth is half a million which is great for at 24 years young! Congrats! I would agree with your dad and add an umbrella policy it is affordable and can protect you should someone try to maliciously attempt to sue you. Extra layers of financial protection are worthwhile. I currently have one and like you I own my own property which was the primary motivation before I carefully looked at my net worth which solidified the decision. Just my two cents. Good luck!

Cheers!

icefr

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Re: Umbrella insurance
« Reply #2 on: February 25, 2013, 01:07:35 PM »
Sounds like your net worth is half a million which is great for at 24 years young! Congrats! I would agree with your dad and add an umbrella policy it is affordable and can protect you should someone try to maliciously attempt to sue you. Extra layers of financial protection are worthwhile. I currently have one and like you I own my own property which was the primary motivation before I carefully looked at my net worth which solidified the decision. Just my two cents. Good luck!

Cheers!

No, it's about a quarter a million including the condo. Does your opinion still hold?

Hamster

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Re: Umbrella insurance
« Reply #3 on: February 25, 2013, 01:40:11 PM »
Last fall, one of our tenants complained to us about twisting her ankle while scooping her dog's poop in the backard of our rental property. As soon as I hung up the phone, I called our insurance company and got a million dollar umbrella policy. I consider it a small expense related to our businesses and I sleep better at night.

TheDude

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Re: Umbrella insurance
« Reply #4 on: February 25, 2013, 01:51:19 PM »
Based on you income I like the idea of an umbrella policy. The more assets you have the more insurance you need (on the high end not the low end). I think 266 seems pretty cheap peace of mind to me.
« Last Edit: February 25, 2013, 01:56:15 PM by TheDude »

momo

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Re: Umbrella insurance
« Reply #5 on: February 25, 2013, 02:55:37 PM »
Sounds like your net worth is half a million which is great for at 24 years young! Congrats! I would agree with your dad and add an umbrella policy it is affordable and can protect you should someone try to maliciously attempt to sue you. Extra layers of financial protection are worthwhile. I currently have one and like you I own my own property which was the primary motivation before I carefully looked at my net worth which solidified the decision. Just my two cents. Good luck!

Cheers!

No, it's about a quarter a million including the condo. Does your opinion still hold?

Yes. Consider adding the umbrella policy. Mine is only $12.00 per month for 1 million. And a quarter million at 24 years young is a great start. Congratulations!

icefr

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Re: Umbrella insurance
« Reply #6 on: February 25, 2013, 10:03:06 PM »
Alright, thanks guys! I guess I'll keep it. Is $2 million necessary? Would it be worth dropping to only $1 million? At what point should I consider raising it further?

The price for $1 million is $216/year, the price of $2 million is $346/year and the price for a $3 million Umbrella policy is $454/year.

Another Reader

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Re: Umbrella insurance
« Reply #7 on: February 26, 2013, 06:57:18 AM »
One of the key features of an umbrella polich is the legal representation the insurance company will provide in the event of a lawsuit if their money is at risk over a frivolous claim.    However, you don't have a lot of assets for a vulture attorney to pick at.  As a more conservative person, I would opt for the $2M in coverage, but I would consider the $1M at your asset level and age.

Rental properties require much more.

Rich M

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Re: Umbrella insurance
« Reply #8 on: April 30, 2013, 06:32:51 PM »
I'm not sure I understand the justification of needing an umbrella policy to protect assets.

If you get sued, you get sued.   Anyone can sue someone whether you have wealth or not if they think they have justification.  Seems everyone might want to have an umbrella!!?

Is the idea that if you don't have assets, you can file for bankruptcy, whereas if you have assets, you don't have that option?

The argument for life insurance is that if you have enough assets,  you can drop life insurance.  This sounds similar....wait or does it mean that if you have wealth, you drop the life insurance and add an umbrella so at least assets stay in family?

I might have answered my own question here and avoided spending more money.


« Last Edit: April 30, 2013, 06:35:37 PM by Rich M »

arebelspy

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Re: Umbrella insurance
« Reply #9 on: April 30, 2013, 06:40:08 PM »
To answer your question Rich: I have it as a landlord because my chance of getting sued is much higher (even though I've always had a good relationship with all my tenants, someone could hurt themselves on a property, etc.).

I have an umbrella policy to protect my assets in case of a lawsuit, yes.

Oh, and I have the same total amount of coverage as OP (considering upping it), but premiums about 3-4X theirs, simply because I have so many rentals covered.  Still well worth it to me.

Does that make sense to you as a justification, in my (or a similar) scenario?
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dragoncar

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Re: Umbrella insurance
« Reply #10 on: April 30, 2013, 07:36:45 PM »
If you are making over 100k, and own property, I think the umbrella insurance is cheap.  I've got $1 million, but not sure if I need more.


Self-employed-swami

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Re: Umbrella insurance
« Reply #11 on: April 30, 2013, 07:41:58 PM »
I own a small business, and I have an extra $1M umbrella policy that covers my business vehicle, our other vehicles, and our house.  I think it costs me something like $180/year, but it is bundled into the homeowner's policy, so I am not too sure on the exact cost. 

It is in addition to the $1M I carry on my work vehicle as well.

MountainFlower

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Re: Umbrella insurance
« Reply #12 on: April 30, 2013, 09:20:19 PM »
I would add that someone making a six-figure salary even without assets needs an umbrella policy as someone might find it attractive to sue and garnish that salary.  But, there isn't a magic number with salary, obviously.  Every situation is different.   

I'd say anyone who enjoys skiing or biking or something where you might inadvertently mow someone over should have it.  Maybe you just play hockey on a weekend league.  This is a litigious world.    Someone sued a 9-year old kid last year for a skiing accident in Vail.  The kid did run into someone and hurt them.    So, that brings up my next point.  If you have kids, I'd get it.  If you have a dog, I'd get it.   It's just the world we live in.  Having been through two lawsuits as a member of an HOA board (the developer sued frivolously twice and lost both times), I agree with the statement that anyone can sue anyone at any time.  Our HOA never recovered the full cost of what those frivolous lawsuits cost.  The legal system isn't always fair.  Insurance will help protect you for not much money.  It seems worth it to me.

chucklesmcgee

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Re: Umbrella insurance
« Reply #13 on: May 01, 2013, 12:28:35 AM »
Some of this is outright paranoia. If you're merely negligent, courts never award damages exceeding net worth, or as a business, its assets. Million dollar and million dollar plus judgement for negligence are so exceedingly improbable- you can see this in the low cost of the policies to add an extra million in coverage. So yes, a million dollar policy is more than enough for you. Just get enough to at least cover your suits

I agree with the general sentiment though that someone with substantial assets, particularly property, should have an umbrella policy of some kind. Insurance is a tax on consequences you can't afford. When you get richer you're able to deal with most expenses on your own such that insurance becomes unneeded- except when those expenses relate to your wealth itself. Courts are often much less sympathetic to rich litigants, and if they find you're negligent they may award larger damages to the plaintiff than ordinary as a sort of punitive measure. Also your wealth itself may make you a target for lawsuits.

tongzhi

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Re: Umbrella insurance
« Reply #14 on: May 01, 2013, 12:32:18 PM »
Does umbrella insurance actually kick in and do what they say it does, has anyone had experience with it when they needed it? Cause it all sounds good on paper.

Rich M

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Re: Umbrella insurance
« Reply #15 on: May 01, 2013, 12:58:07 PM »
I think where I was going with my comments is that it seems to me in a sue happy world, EVERYONE should have an umbrella.  Sure, it will protect your wealth if you have wealth, but doesn't is also protect your ability to obtain wealth if you don't have wealth? 


I mean if I got sued for a $100k and didn't have much saved, and suddenly they garnish my wages for ten years, it's the equivalent of losing assets!

Is there some notion that people will more likely get sued if they have wealth?  Nobody knows anything about how much I have in the bank. The only thing they can judge my on is my house and car--and for all they know, both could have large loans on them.

« Last Edit: May 01, 2013, 01:09:13 PM by Rich M »

yolfer

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Re: Umbrella insurance
« Reply #16 on: May 01, 2013, 01:25:19 PM »
If your umbrella is so valuable that you need to take out an insurance policy on it, maybe it's time to get a less expensive umbrella? How many times a year do you use it? I could see getting it insured in, say, Seattle, where it rains a lot. But not so much in Southern California or Arizona. Having an expensive umbrella seems pretty unmustachian to me.

;)

jrhampt

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Re: Umbrella insurance
« Reply #17 on: May 01, 2013, 01:36:22 PM »
Hmm.  I own a home, but no rental properties or businesses.  No kids or dogs.  I do have a decent income, but most of our net worth is in retirement accounts, which I believe are exempted from lawsuits.  If I had a business or rental property, I would definitely have umbrella insurance.  As it is, I am not convinced that I need it.

Hamster

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Re: Umbrella insurance
« Reply #18 on: May 01, 2013, 01:49:44 PM »
If your umbrella is so valuable that you need to take out an insurance policy on it, maybe it's time to get a less expensive umbrella? How many times a year do you use it? I could see getting it insured in, say, Seattle, where it rains a lot... ;)
But the only people using umbrellas in Seattle are the tourists.

dragoncar

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Re: Umbrella insurance
« Reply #19 on: May 01, 2013, 02:01:21 PM »
Lol yolfer.

Yes having wealth, or the appearance of wealth, increases the likelihood of being sued.  It's usually not worth the effort of suing someone who will immediately declare bankruptcy ( personal vendettas aside).

Most litigators will do some basic investigation into a potential defendant: property records and other public records plus a little private investigation level work.  On the other hand, having a large insurance policy also makes you attractive because they know the funds are available.

In general, though, if you look (in life and on paper) like a broke vagrant, you probably won't get sued.

BayIslandSaver

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Re: Umbrella insurance
« Reply #20 on: May 01, 2013, 03:18:49 PM »
Hmm.  I own a home, but no rental properties or businesses.  No kids or dogs.  I do have a decent income, but most of our net worth is in retirement accounts, which I believe are exempted from lawsuits.  If I had a business or rental property, I would definitely have umbrella insurance.  As it is, I am not convinced that I need it.

I believe 401(k)s and pensions are protected from all judgments, but other accounts (IRAs) vary from state to state.

arebelspy

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Re: Umbrella insurance
« Reply #21 on: May 01, 2013, 03:29:29 PM »
If your umbrella is so valuable that you need to take out an insurance policy on it, maybe it's time to get a less expensive umbrella? How many times a year do you use it? I could see getting it insured in, say, Seattle, where it rains a lot. But not so much in Southern California or Arizona. Having an expensive umbrella seems pretty unmustachian to me.

;)

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StarryC

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Re: Umbrella insurance
« Reply #22 on: May 01, 2013, 03:30:18 PM »
If you're merely negligent, courts never award damages exceeding net worth, or as a business, its assets.

This is not true.  The damages in negligence are based on making the Plaintiff whole.  This applies even if the Plaintiff was already very susceptible to a serious injury etc. http://en.wikipedia.org/wiki/Eggshell_skull  You might be thinking of "punitive" damages where one factor is the ability of the defendant to pay. 

There are 2 reasons an umbrella makes sense for someone with a higher net worth. 1) You can afford it.  $300 a year on a high salary/net worth is not much.  However, on a $30,000 a year salary, net worth you might be giving up something with a more immediate and guranteed benefit.
2) "Judgment Proof"/ "You can't get blood from a stone."  Let say your vicous rottweiler bites your neighbor's kid's face off.  Your homeowners has a $300,000 limit for liability.  Their total damages awarded by a jury could be 1.3 million.  If you make $30,000 a year, and have savings of $5,000 the Plaintiff's attorney might tell their client that they should take the "policy limits" because getting more from you is unlikely.   But most lawyers don't want to go to the hassle of doing that to get $5,000 a year for the next 20 years until the jdugment expires. But if you have $100,000 in the bank, and make that much again each year, then they can garnish a much higher amount.  It probably is worth it for them to seize the bank account.  It might even be worth it for them to garnish your wages for 20 years at $25,000 a year to get $500,000. 

People who are "judgment proof" don't need additional insurance because most lawyers aren't willing to spend $3000 to get $5000.  But they are willing to spend $3,000 to get $150,000. 

Also, the amount of equity in the home matters.  Most states exempt some amount of value in a residence from a judgment.  If your equity is below that amount, they can't seize the home.  If you own your home free and clear, it might be seizable. 

dragoncar

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Re: Umbrella insurance
« Reply #23 on: May 01, 2013, 04:32:34 PM »
If you're merely negligent, courts never award damages exceeding net worth, or as a business, its assets.


I love it when someone who just took torts opines on what a court would Never do :-)

Rich M

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Re: Umbrella insurance
« Reply #24 on: May 01, 2013, 07:54:25 PM »
If you're merely negligent, courts never award damages exceeding net worth, or as a business, its assets.

This is not true.  The damages in negligence are based on making the Plaintiff whole.  This applies even if the Plaintiff was already very susceptible to a serious injury etc. http://en.wikipedia.org/wiki/Eggshell_skull  You might be thinking of "punitive" damages where one factor is the ability of the defendant to pay. 

There are 2 reasons an umbrella makes sense for someone with a higher net worth. 1) You can afford it.  $300 a year on a high salary/net worth is not much.  However, on a $30,000 a year salary, net worth you might be giving up something with a more immediate and guranteed benefit.
2) "Judgment Proof"/ "You can't get blood from a stone."  Let say your vicous rottweiler bites your neighbor's kid's face off.  Your homeowners has a $300,000 limit for liability.  Their total damages awarded by a jury could be 1.3 million.  If you make $30,000 a year, and have savings of $5,000 the Plaintiff's attorney might tell their client that they should take the "policy limits" because getting more from you is unlikely.   But most lawyers don't want to go to the hassle of doing that to get $5,000 a year for the next 20 years until the jdugment expires. But if you have $100,000 in the bank, and make that much again each year, then they can garnish a much higher amount.  It probably is worth it for them to seize the bank account.  It might even be worth it for them to garnish your wages for 20 years at $25,000 a year to get $500,000. 

People who are "judgment proof" don't need additional insurance because most lawyers aren't willing to spend $3000 to get $5000.  But they are willing to spend $3,000 to get $150,000. 

Also, the amount of equity in the home matters.  Most states exempt some amount of value in a residence from a judgment.  If your equity is below that amount, they can't seize the home.  If you own your home free and clear, it might be seizable.

Wow. Thanks for your post!

chucklesmcgee

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Re: Umbrella insurance
« Reply #25 on: May 02, 2013, 08:36:01 AM »
If you're merely negligent, courts never award damages exceeding net worth, or as a business, its assets.


I love it when someone who just took torts opines on what a court would Never do :-)

It would be unprecedented.

StarryC

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Re: Umbrella insurance
« Reply #26 on: May 02, 2013, 11:31:57 AM »
I am not aware of how a U.S. court or a jury could hear any direct evidence of a defendant's income or assets in a trial for a negligent tort where there was NOT a punitive damages claim.  The jury and court simply do not know whether or not their award exceeds the insurance policy or assets of the defendant.  In fact, the reason plaintiffs in cases seek to add punitive damages claims is often to allow in evidence of how wealthy the defendant is.   The measure of damages is the amount of harm done to the plaintiff and therefore the assets of a defendant are not legally relevant.

 Therefore, courts could and do award an amount that is more than someone has in assets.   That award may later be reduced by the court if it was an excessive jury award (based on the facts of the loss= "reducir") or reduced by an agreement of the parties.  The award might be "uncollectable." But it would still be a valid judgment.

This is the source of many "bad faith" claims against insurance companies:  Insurance co refuses to settle, jury awards more than the policy holder has or can pay, and the policy holder says the insurance company should have settled. 

Chuckles, you might be thinking of punitive damages, or unjust enrichment claims, or be in another country, or perhaps a jurisdiction I am unfamiliar with.  Either way, even if the court was only going to award 80% of your assets, you might wish to avoid paying your assets over by having an umbrella insurance policy. 

dragoncar

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Re: Umbrella insurance
« Reply #27 on: May 02, 2013, 01:28:24 PM »
^ even assuming, arguendo, that chuckles is correct, can we really trust ourselves to be "merely negligent" all the time?  Can we be sure a jury will agree with our interpretation?

AccidentalMiser

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Re: Umbrella insurance
« Reply #28 on: May 02, 2013, 03:26:33 PM »
Great commentary.  I'll just add my vote to keeping the 2M umbrella policy (while I get ready to purchase one of my own!)

chucklesmcgee

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Re: Umbrella insurance
« Reply #29 on: May 02, 2013, 10:43:16 PM »
Either way, even if the court was only going to award 80% of your assets, you might wish to avoid paying your assets over by having an umbrella insurance policy.

I completely agree with that. My point is that there's no need for your insurance policy to much exceed your assets.

While it's legally permissible to award non-punitive damages exceeding assets, it just doesn't happen, probably for a number of reasons. Practically, insurance companies weigh quickly settling at policy limits or the cost of doing all the research, the filing, hiring and interviewing professional witnesses, occupying their attorneys etc and taking it to court. If they take it to court, they might be awarded with nothing or less than policy limits. And if they do win an amount beyond your policy limits, collecting on that can be a real pain. It's even more of a pain if that involves seizing assets. And I've not heard of garnishing wages for a tort claim...not to say it couldn't happen, but the difficulty of getting such an order along with the relatively meager pay most people would have relative to these very large judgments just doesn't make sense.

Also, to a jury, you become a far more sympathetic defendant if it turns out that you stand to lose everything and be put out onto the streets. Even if the plaintiff is some little paralyzed girl, juries still may sway in your favor and award $1m, your policy limit to her, instead of bankrupting you. Juries are very human and it's extremely difficult to penalize someone for merely negligent conduct that they know they themselves could have just as easily done (driving the speed limit, it was dark, pedestrian was wearing dark clothes, probably should have seen her but just didn't see her in time). If you're reckless and driving drunk, all bets are off.

Finally, it's just extremely improbable you're involved in such a large tort claim, especially with the caps put in on pain and suffering damages by most states. It's tough to rack up that much damage against someone negligently. If you aren't a doctor or an employer, there have

Quote
can we really trust ourselves to be "merely negligent" all the time?  Can we be sure a jury will agree with our interpretation?
Quote

Well, I'd hope you're never negligent! It's much more difficult to prove recklessness- they'd have to show that you "consciously disregard a substantial and unjustifiable risk" and "its disregard involves a gross deviation from the standard of conduct that a law-abiding person would observe in the actor's situation". That's a fairly hefty burden and not something that's raised in most tort claims umbrella policy holders are involved in. Don't go out drinking and driving or drag-racing or decide you should try setting off questionable firecrackers right by your neighbor's extremely flammable fertilizer pit!

In the end we're niggling over the finer points here. Going from $1M to 2M on the policy honestly isn't that much (at least for someone with at least SOME sort of decent stashe) so if it helps you sleep well at night, whatever. The fact that it's so cheap suggests that's it's extraordinarily improbable that your insurance company would ever actually need to pay more than $1M. If that's the case though, why not $5M? Or $10M? That would really doom you with a $10M judgement.

dragoncar

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Re: Umbrella insurance
« Reply #30 on: May 03, 2013, 03:32:24 AM »

Going from $1M to 2M on the policy honestly isn't that much (at least for someone with at least SOME sort of decent stashe) so if it helps you sleep well at night, whatever. The fact that it's so cheap suggests that's it's extraordinarily improbable that your insurance company would ever actually need to pay more than $1M.

Asymmetric information.  They don't know about my hobby of punching people right in the face!


(metaphically speaking of course.  I know most insurance policies exclude intentional torts)

Nords

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Re: Umbrella insurance
« Reply #31 on: May 04, 2013, 09:55:51 PM »
Some of this is outright paranoia. If you're merely negligent, courts never award damages exceeding net worth, or as a business, its assets.
I would think that the court (and the jury) would have no problem awarding damages exceeding my net worth.  After all, they don't have to worry about paying my mortgages.

They might even award damages exceeding my gross worth, so I'm happy to insure at least that amount.

BlueMR2

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Re: Umbrella insurance
« Reply #32 on: September 06, 2013, 02:02:48 PM »
Sorry for bringing this one back from the dead, but I thought it better to keep the info together...

I'd like to do a $2m umbrella as I see these judgements coming down for $1.1-1.5m on TV for things that could happen to anybody.  I'm told it's relatively cheap insurance, yet I'm getting really high quotes.  Why on Earth am I getting quotes for $400/yr for $1m/$600/yr for $2m when I keep reading about $200/yr for $1m and $260/yr for $2m?  Am I too young (39)?  I don't have kids.  I don't have rentals/other high exposure items.

As much as I'd like to have it in case of disaster, those rates are in the area where I might just have to roll the dice and hope I don't get hit with a big lawsuit.

jrhampt

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Re: Umbrella insurance
« Reply #33 on: September 06, 2013, 03:13:14 PM »
I looked into umbrella insurance a little while back and decided against at the time for a few reasons:

I don't think we're high risk - we don't have businesses, rental properties, teenage drivers, or dogs.  I barely drive at all, and my husband hasn't had an accident on his record ever. 

We didn't have too many assets at the time.

In order to get umbrella insurance, our car insurance would have become more expensive - I think we would have had to increase our liability coverage before we could get the umbrella coverage.

Now that our assets our growing, I intend to give my insurance company a call and revisit the subject.  Thanks for the reminder.

dragoncar

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Re: Umbrella insurance
« Reply #34 on: September 06, 2013, 03:25:55 PM »
Sorry for bringing this one back from the dead, but I thought it better to keep the info together...

I'd like to do a $2m umbrella as I see these judgements coming down for $1.1-1.5m on TV for things that could happen to anybody.  I'm told it's relatively cheap insurance, yet I'm getting really high quotes.  Why on Earth am I getting quotes for $400/yr for $1m/$600/yr for $2m when I keep reading about $200/yr for $1m and $260/yr for $2m?  Am I too young (39)?  I don't have kids.  I don't have rentals/other high exposure items.

As much as I'd like to have it in case of disaster, those rates are in the area where I might just have to roll the dice and hope I don't get hit with a big lawsuit.

That does sound really high.  Keep digging.

BlueMR2

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Re: Umbrella insurance
« Reply #35 on: September 06, 2013, 03:56:09 PM »
That does sound really high.  Keep digging.

I'm thinking maybe Ohio is just really expensive...  The info I'm finding specific to my location has taglines like "$1m for as low as $1 a day"...  Well, yep, that's where the quotes appear to be going too...  And I'd have to switch my auto/home over to them too.

Curious to hear more about people getting it for half that.  Doesn't seem realistic for my area.  If that is realistic for my area, it must be high for a reason, so I'm even more likely to need it, so I really should get it despite the expense.  I guess we'll have to trim some other areas a bit tighter so we can afford this!

jawisco

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Re: Umbrella insurance
« Reply #36 on: September 06, 2013, 05:01:40 PM »
I have $2 million umbrella policy.  I came to this topic with the hope that I would be convinced to stop carrying my policy, but to no avail.

One thing to keep in mind is that it is quite unlikely that you will ever need umbrella insurance - that is why it is so cheap (there are exceptions to this of course).

I think the OP would be fine with $1 million. 

I think whether you need it also depends on how much in assets are in retirement accounts (hard to get at) or their own personal real estate (depending on your state) and how willing someone is to declare bankruptcy.

fiveoclockshadow

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Re: Umbrella insurance
« Reply #37 on: September 07, 2013, 05:16:29 AM »
Cost depends a lot on location. More than a factor of two based on location. There are other factors too like number of vehicles owned. Threshold is two or three depending on the underwriter. Expect another 30% to 50% increase if over that threshold. 

I can't find it easily right now but there is a underwriter than actually has all the calculation forms online so you can get an idea of the cost factors. Some Googling should turn it up.

Dee18

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Re: Umbrella insurance
« Reply #38 on: September 07, 2013, 05:56:33 AM »
I decided to get an umbrella policy last year.  A lawyer friend had been urging me to do so for years and when I increased my car insurance coverage (when my 16 year old received her license) the additional cost was under $ 200/ year.  One factor in my decision was the jury awards in my state. 

fiveoclockshadow

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Re: Umbrella insurance
« Reply #39 on: September 07, 2013, 07:16:32 AM »
Found it:

http://www.rlipersonalumbrella.com/excessum/default.asp

From there pick your state (or others for comparison) and you can download the application form.  From that form you can see all the factors that affect the rate.  By looking at multiple different states (and zip codes within) you can get a feel for the wide range in costs.  Not recommending these folks at all, but it is the one place I know that you can easily compare rates based on location and understand all the actuarial variables that go into the price for a policy.

I was in a similar situation when I finally set up my policy recently - much more expensive than I was seeing in various threads.  This despite using USAA which usually has very competitive rates.  Well, looking at those threads I saw most of the cheap estimates were coming from posters who lived in rural podunk nowhere.  I on the other hand live in a rather expensive state and worse in the most expensive zip code in the whole state.  Once I factored that in USAA was in fact a good price.  Near as I can tell the other big factor is as I mentioned number of vehicles owned, if you have three vehicles comparison shop because the hit for a policy that has a two vehicle threshold may be high.

It goes without saying that if you want both your home owners policy and umbrella policy to be incredibly expensive just go purchase a trampoline.

arebelspy

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Re: Umbrella insurance
« Reply #40 on: September 07, 2013, 08:52:13 AM »
Found it:

http://www.rlipersonalumbrella.com/excessum/default.asp

From there pick your state (or others for comparison) and you can download the application form.  From that form you can see all the factors that affect the rate.  By looking at multiple different states (and zip codes within) you can get a feel for the wide range in costs.  Not recommending these folks at all, but it is the one place I know that you can easily compare rates based on location and understand all the actuarial variables that go into the price for a policy.

I was in a similar situation when I finally set up my policy recently - much more expensive than I was seeing in various threads.  This despite using USAA which usually has very competitive rates.  Well, looking at those threads I saw most of the cheap estimates were coming from posters who lived in rural podunk nowhere.  I on the other hand live in a rather expensive state and worse in the most expensive zip code in the whole state.  Once I factored that in USAA was in fact a good price.  Near as I can tell the other big factor is as I mentioned number of vehicles owned, if you have three vehicles comparison shop because the hit for a policy that has a two vehicle threshold may be high.

It goes without saying that if you want both your home owners policy and umbrella policy to be incredibly expensive just go purchase a trampoline.

It probably says a lot about me that I enjoyed spending 15 minutes or so looking through that PDF.

Thanks for sharing!
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dragoncar

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Re: Umbrella insurance
« Reply #41 on: September 07, 2013, 10:14:43 AM »
That does sound really high.  Keep digging.

I'm thinking maybe Ohio is just really expensive...  The info I'm finding specific to my location has taglines like "$1m for as low as $1 a day"...  Well, yep, that's where the quotes appear to be going too...  And I'd have to switch my auto/home over to them too.

Curious to hear more about people getting it for half that.  Doesn't seem realistic for my area.  If that is realistic for my area, it must be high for a reason, so I'm even more likely to need it, so I really should get it despite the expense.  I guess we'll have to trim some other areas a bit tighter so we can afford this!

Location could be it.  For reference, I just renewed with liberty mutual through geico:  $160 for a $1 million policy, and I get like $20 off my car premium so its effectively less.

This is in California with 1 car and renters insurance liability at 300k limits. Early 30s

icefr

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Re: Umbrella insurance
« Reply #42 on: September 07, 2013, 03:39:45 PM »
Location could be it.  For reference, I just renewed with liberty mutual through geico:  $160 for a $1 million policy, and I get like $20 off my car premium so its effectively less.

This is in California with 1 car and renters insurance liability at 300k limits. Early 30s

Wow! I switched insurance companies and I paid $158 for a $2 million policy, on top of my car insurance. At $158/year, I decided to just keep it.

BlueMR2

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Re: Umbrella insurance
« Reply #43 on: September 08, 2013, 07:22:22 AM »
Found it:

http://www.rlipersonalumbrella.com/excessum/default.asp

Near as I can tell the other big factor is as I mentioned number of vehicles owned, if you have three vehicles comparison shop because the hit for a policy that has a two vehicle threshold may be high.

Yep, that's it.  It's a number of vehicles owned thing that's nearly doubling my quotes.  Technically, I'm still in the cheap zone at this exact moment, but I'm in the process of buying a motorcycle.  While nobody cares about the fact that it's a motorcycle, it pushes my total vehicle count out of "preferred" and in the nearly 2x as expensive "standard" category...

As a side note, I think I found the savings to make up for that...  If I buy a motorcycle that has ABS, my motorcycle insurance savings will pay for that extra umbrella expense...  Insurance cost for ABS vs. non-ABS is less than half!  As far as the vehicle itself, right now the same motorcycle w/ABS only costs around $500 more than without (on a $5000 vehicle).  Once I balance all this stuff out (including all my operational expenses), I'm back to saving about $500 a year buying a motorcycle and riding it on the nice days to my too far away job...  While that's still an 11 year payback, at least it's a payback eventually and not a continual money suck...  :-)

SunshineGirl

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Re: Umbrella insurance
« Reply #44 on: September 08, 2013, 08:22:06 AM »
To answer your question Rich: I have it as a landlord because my chance of getting sued is much higher (even though I've always had a good relationship with all my tenants, someone could hurt themselves on a property, etc.).

I have an umbrella policy to protect my assets in case of a lawsuit, yes.

Oh, and I have the same total amount of coverage as OP (considering upping it), but premiums about 3-4X theirs, simply because I have so many rentals covered.  Still well worth it to me.

Does that make sense to you as a justification, in my (or a similar) scenario?

Arebelspy, aren't your properties individual LLCs? And if I can ask, what company insures you? 

oldtoyota

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Re: Umbrella insurance
« Reply #45 on: September 08, 2013, 09:21:05 AM »
Sounds like your net worth is half a million which is great for at 24 years young! Congrats! I would agree with your dad and add an umbrella policy it is affordable and can protect you should someone try to maliciously attempt to sue you. Extra layers of financial protection are worthwhile. I currently have one and like you I own my own property which was the primary motivation before I carefully looked at my net worth which solidified the decision. Just my two cents. Good luck!

Cheers!

Could you share what company you use? I would like to research companies that offer these policies.

No, it's about a quarter a million including the condo. Does your opinion still hold?

Yes. Consider adding the umbrella policy. Mine is only $12.00 per month for 1 million. And a quarter million at 24 years young is a great start. Congratulations!

jrhampt

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Re: Umbrella insurance
« Reply #46 on: October 02, 2013, 08:01:31 PM »
Here's what my insurance company told me:

I would have to increase my car insurance liability coverage, which would cost me an extra $129/6 months, or $260/yr.  The umbrella policy itself would cost a little over $300/yr for 1 million in coverage.  That's $500-$600 extra a year, or about $50/mo.