Author Topic: How much liability insurance do you carry?  (Read 2575 times)

ohsnap

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How much liability insurance do you carry?
« on: April 01, 2021, 12:53:56 PM »
We moved recently so I was inspired to do my every-so-often insurance check.

I got a car insurance quote from Geico that will save us $30/month. Coverages are the same as our current company, except that we have $500k/$1000k liability and uninsured motorist with our current company, and the max that Geico will quote is $300k/$500k.  The premium difference is not solely based on this - if I reduced my liability coverage with my current company, it would only save a few $ per month.

We are generally safe drivers - we don't drive distracted or at excessive speeds.  I think I'm more worried about the un/under insured coverage than I am the liability.  As I understand it, if the breadwinner in our family got killed or disabled in an accident, our policy would pay damages of up to $500k if the at-fault party was insufficiently insured.

I know that if I asked this over at bogleheads, they'd say I need the $500k/$1000k liability PLUS a $2MM umbrella policy. :D. What say Mustachians?

seemsright

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Re: How much liability insurance do you carry?
« Reply #1 on: April 01, 2021, 01:01:00 PM »
I suggest to call a insurance broker and have them give you quotes from different agencies. Because Geico could be the most expensive of your options, and a PITA to deal with if you needed to. Insurance rules vary per state. So your answers will vary widely.

We are almost at the point where we need a umbrella. Our broker has a formula that he uses to determine when that is needed and he has our insurance at a point where we are still okay. But we look at insurance every year during our yearly shake down. 

Fuzz

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Re: How much liability insurance do you carry?
« Reply #2 on: April 01, 2021, 03:05:33 PM »
Check if Geico offers both uninsured coverage and underinsured coverage. They're different. You want both. You want at least 500K and a 1M umbrella with assets. It should not be that expensive.

Sailor Sam

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Re: How much liability insurance do you carry?
« Reply #3 on: April 01, 2021, 03:24:37 PM »
I carry $500/$1000 in liability, and $2m in an umbrella policy.

Iíve also been in a real bad smash up that involved the hydraulic opener, and jail time, so Iím warier than some. It takes seconds to ruin someoneís car, or life, and I want to make sure that anything my fault is covered for that other person.

ysette9

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Re: How much liability insurance do you carry?
« Reply #4 on: April 01, 2021, 04:06:11 PM »
I carry $500/$1000 in liability, and $2m in an umbrella policy.

Iíve also been in a real bad smash up that involved the hydraulic opener, and jail time, so Iím warier than some. It takes seconds to ruin someoneís car, or life, and I want to make sure that anything my fault is covered for that other person.
Yup, same here. Umbrella insurance is super cheap, so why not buy a lot? That said, you can't buy umbrella and expect it to step in to fill the hole of you being cheap on car insurance, so it is important to have high coverage limits there also. We have assets to protect so the peace of mind is worth it to us.

Malcat

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Re: How much liability insurance do you carry?
« Reply #5 on: April 01, 2021, 04:13:12 PM »
2M, I think?

seattlecyclone

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Re: How much liability insurance do you carry?
« Reply #6 on: April 01, 2021, 05:08:44 PM »
I know that if I asked this over at bogleheads, they'd say I need the $500k/$1000k liability PLUS a $2MM umbrella policy. :D. What say Mustachians?

If you go the umbrella route that policy will have an exclusion amount (doesn't cover the first $X of liability). You'll be requested if not required to set your auto limits to that amount, and there's then no point to going any higher than that with the auto policy.

I personally have a $2 million umbrella.

No underinsured motorist coverage for us. That's what health insurance and disability insurance are for. Buying underinsured motorist coverage makes sure you'll get paid if you're badly injured in a crash that was someone else's fault, but not at all if you get badly injured in a crash that's your own fault. You're either overinsured for the former case or underinsured for the latter case. Disability insurance will pay you the same either way.

reeshau

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Re: How much liability insurance do you carry?
« Reply #7 on: April 01, 2021, 07:19:24 PM »
An umbrella policy protects your stache if you are found at fault for something.  The other aspects of your auto policy are for if someone else is at fault, so not related.  But, as @seattlecyclone says, you should coordinate your auto and umbrella limits to make sure you don't leave a gap.

So, umbrella amount >= stache amount.  (Because they only go in so many increments, and change it so often)  Then if you are ever sued "for every penny you have!" then instead, the insurance company's lawyers show up.  As was also said above, states can vary on laws about exclusions, like primary residence, retirement savings, etc. so make sure you are talking with someone who can speak to that.

There is some quirky behavior by the insurance companies that is really telling about what kinds of events trigger umbrellas.  Very few companies will write a standalone umbrella policy; they typically coordinate with other policies, so that can be difficult across companies.  State Farm wouldn't even write us one without a car, even though we own our home.  I always though slip and fall type cases were a big deal.  Of course, that might be rare in Houston.  When I was working overseas, a $2M umbrella was part of my expat insurance bundle from Chubb, along with car and home.
« Last Edit: April 01, 2021, 07:23:37 PM by reeshau »

cool7hand

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Re: How much liability insurance do you carry?
« Reply #8 on: April 02, 2021, 07:40:35 AM »
I used to work in the industry before FIRE. My thoughts are here: https://forum.mrmoneymustache.com/welcome-to-the-forum/umbrella-insurance-119082/.

ohsnap

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Re: How much liability insurance do you carry?
« Reply #9 on: April 05, 2021, 12:20:07 PM »
Thanks for the replies - they are a lot more boglehead-ish than I expected!

I used to work in the industry before FIRE. My thoughts are here: https://forum.mrmoneymustache.com/welcome-to-the-forum/umbrella-insurance-119082/.
Thanks for the link - that thread was really informative.  Interesting to hear from someone who was in the insurance business, and also the poster who said they are a personal injury attorney.