Author Topic: . (Read 6957 times)

Argyle · « **Reply #1 on:** October 13, 2015, 10:28:07 AM »

Yes, I've got it. I haven't had reason to make a claim, but I was thinking I might have to when a contractor got hurt on my property. It wasn't my fault, but I was worried that they would try to make it my fault. My parents did get sued in similar circumstances and it was a nightmare for them. The insurance costs me $114 a year, and I think it's worth it for the peace of mind.

Bruinguy · « **Reply #2 on:** October 13, 2015, 10:35:05 AM »

I support the idea of umbrella insurance. It is unlikely that you will need it, but it is cheap and can protect that $1.6 million.

Valetta · « **Reply #3 on:** October 13, 2015, 10:56:59 AM »

We have it. It's very inexpensive and you'll be really glad if you end up needing it. The main reason we decided to get it was because we have a rental property but now that I know more about it, I would have gotten it even if I didn't have the rental.

Fishindude · « **Reply #4 on:** October 13, 2015, 11:01:36 AM »

I carry a policy.
It's pretty inexpensive and a good idea.

Noahjoe · « **Reply #5 on:** October 13, 2015, 11:49:35 AM »

The only things you should insure are things that could ruin you financially. Could a litigious butthead that slips/falls in your driveway ruin you financially? If yes, buy the policy. Anyone in the 2 comma club should probably have an umbrella policy.

FLBiker · « **Reply #6 on:** October 13, 2015, 11:52:19 AM »

On my to do list. We're only worth ~$400K, though, so maybe we don't need it yet.

Rein1987 · « **Reply #7 on:** October 13, 2015, 12:01:34 PM »

We took the umbrella insurance when we had only half a million networth. It was only about $100 or so a year.

BlueMR2 · « **Reply #8 on:** October 13, 2015, 12:50:14 PM »

I support the idea.

However, it's too rich for my blood currently. We fall into the "high risk" category (due to number of vehicles owned) and quotes come in over $700/yr... That's a pretty good sized chunk of our budget and given how few miles we actually drive any of them, it doesn't seem the right choice right now.

A relative of mine just sold her last car. I never realized that if you don't own a car, you can't have umbrella coverage... I thought you could have it on a house policy, but apparently not (at least here).

honeybbq · « **Reply #9 on:** October 13, 2015, 02:54:17 PM »

Quote from: Noahjoe on October 13, 2015, 11:49:35 AM

The only things you should insure are things that could ruin you financially. Could a litigious butthead that slips/falls in your driveway ruin you financially? If yes, buy the policy. Anyone in the 2 comma club should probably have an umbrella policy.

Yep. We have a 2 mil policy.

Eurotexan · « **Reply #10 on:** October 13, 2015, 03:16:53 PM »

Absolutely! I have my policy with Travelers and I pay about $115 per year. I call it my 'sleep easy insurance'.

cheddarpie · « **Reply #11 on:** October 13, 2015, 03:17:10 PM »

Yes. I think a $1m policy at minimum is a good idea if you own a home and have people who come on to your property who might slip and fall or have other injuries, or if you have other substantial assets that could be subject to liability risk. It will also protect you anywhere you travel and lets you carry the absolute minimum for liability on other policies (auto, homeowners), since the umbrella will kick in when needed. As others noted, umbrella policies are generally very inexpensive. Litigation, on the other hand, is a very quick way to thrash your stash. :)

MoonShadow · « **Reply #12 on:** October 13, 2015, 03:25:19 PM »

I've got it also. I started using it when I was still riding a bike to work, as it covers me even if I was hit by a car that either took off or had no insurance. This functioned as a secondary accident/health insurance for whatever my regular health insurance didn't cover. It's so cheap, I didn't bother getting rid of it when I moved out of town, but I did reduce the hit-&-run max coverage.

Bellatrix · « **Reply #13 on:** October 13, 2015, 03:43:12 PM »

I think anyone with assets should have umbrella insurance. It is one of the first things I bought when my net worth went from negative to positive.

Clean Shaven · « **Reply #14 on:** October 13, 2015, 03:50:38 PM »

Quote from: cheddarpie on October 13, 2015, 03:17:10 PM

It will also protect you anywhere you travel and lets you carry the absolute minimum for liability on other policies (auto, homeowners), since the umbrella will kick in when needed.

Umbrella policies generally require a higher level of primary coverage on the underlying policies -- i.e., before the insurance company will sell you a $1M umbrella, they will require you to have 250/500* on your auto. They won't sell you an umbrella over a 25/50 auto policy.

*exact # will vary

Argyle · « **Reply #15 on:** October 13, 2015, 03:52:41 PM »

My $114 policy is from State Farm.

MoonShadow · « **Reply #16 on:** October 13, 2015, 06:37:53 PM »

Wow. This seems to be one of those few things this community is in full agreement with. Has MMM ever done an article on umbrella insurance?

Suzaloo · « **Reply #17 on:** October 13, 2015, 07:51:52 PM »

As an insurance agent (Canadian, so a bit skewed to our system). I would first ask why you think you may need umbrella (excess) liability insurance? Generally, I would want to know if you're sitting on any non profit boards, taking care of other people's kids, have an airplane or what particular profession you're in. All are factors in whether it is the best fit for you. For many, (and again, I'm speaking from my Northern perspective), they don't need the extra types of coverage an umbrella encompasses, but may be better served (and more cheaply) by increasing the liability limits under their existing home/auto insurance. (not to mention, my company wants matching liability limits on the home/auto first). Best to first have a frank discussion with your insurance agent/broker about which would be the better direction for you to take.

kodokan · « **Reply #18 on:** October 13, 2015, 08:35:09 PM »

It's not just to protect your present assets either - if you have a high income, then a claim could also be made against your future income stream. We have it, as the cost is worth the sleepeasy factor.

Another Reader · « **Reply #19 on:** October 13, 2015, 09:06:26 PM »

If you own rentals, it's a critical element of protecting your assets. If someone is killed or severely injured on your property, you will need the protection. The amount should equal the assets at risk plus something to cover your future income.

nawhite · « **Reply #20 on:** October 13, 2015, 09:34:28 PM »

I like it, and if you have a rental property you need it, but most people base how much they need off the wrong things.

The amount of umbrella insurance you have should not be based off your net worth, it should be based off the amount of a likely claim against you. Having lower net worth just puts a floor on the amount someone suing you will get before you declare bankruptcy. Let's say you unintentionally force a van full of high school cheerleaders off the road and they all die. You're going to get sued for around $25-50 million so having $1 million or $2 million or $5 million in umbrella coverage won't help, you're still declaring bankruptcy.

Umbrella coverage just says, I can be sued for this much money and not lose my life savings (whatever amount you life savings is). Some people put a high value on "not losing life savings" and even generally the more life savings you have the more value you should put on "not losing everything" but umbrella coverage is just saying "I can do x amount wrong and not lose everything."

aspiringnomad · « **Reply #21 on:** October 13, 2015, 09:54:56 PM »

A discussion on this topic from earlier this year:

http://forum.mrmoneymustache.com/ask-a-mustachian/umbrella-insurance-yay-or-nay/msg509203/#msg509203

Dee18 · « **Reply #22 on:** October 14, 2015, 06:42:17 AM »

I have and pay $94 per year to USAA.

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