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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: FireAnt on April 15, 2020, 05:21:44 PM

Title: Umbrella insurance
Post by: FireAnt on April 15, 2020, 05:21:44 PM
Who has umbrella insurance? Who through and is it bundled with your home or auto insurance?

We are having an unusually hard time finding coverage. Our auto insurance (Geico) said no, and PolicyGenius who we used for homeowners insurance said they could not find "any viable options". So odd.

Title: Re: Umbrella insurance
Post by: RetiredAt63 on April 15, 2020, 06:52:58 PM
I'm in Canada so there may be differences.  I have umbrella insurance, one policy for apartment and car - was one policy for car and house when I was a house owner.

I got it through an insurance broker.  It was competitive with any insurance my alumni associations were offering, and my broker knew which companies would be responsible in need and which would give me grief with a claim.  One basement flood, one car hit by a deer, one car hit by another car, never any issues with the claims.
Title: Re: Umbrella insurance
Post by: terran on April 15, 2020, 08:50:08 PM
We have ours through Geico where we also have auto, but not renters. Did they give you a reason?
Title: Re: Umbrella insurance
Post by: FireAnt on April 16, 2020, 07:01:18 AM
We have ours through Geico where we also have auto, but not renters. Did they give you a reason?

No, but I plan to call them about it. The only thing I can think of is 1.5 years ago I got into a rollover accident so maybe they have me classified as high risk? I'm not sure.
Title: Re: Umbrella insurance
Post by: Fishindude on April 16, 2020, 07:33:10 AM
We have a $2 mil umbrella policy through state farm.
Anyone that has any significant net worth should have an umbrella policy.   It is intended to cover anything that slips through the cracks or exceeds coverage of your other policies.
Title: Re: Umbrella insurance
Post by: reeshau on April 16, 2020, 08:29:02 AM
Most insurers will only issue an umbrella in conjunction with auto or homeowners, because that's generally where big lawsuits are involved.  It also has practical implications: an umbrella may start at damages above $100k, for example, because it assumes another underlying policy has coverage up to that point. Here is an older article, but with some alternatives:

https://www.irmi.com/articles/expert-commentary/comparing-stand-alone-personal-umbrella-policies
Title: Re: Umbrella insurance
Post by: BlueMR2 on April 16, 2020, 08:49:14 AM
I do not have, but research it every couple of years.  My auto/home carrier can get it for me.  I have also found that some other places will offer it with no pre-existing relationship.  They just need documentation on your current insurance and it will rely on the existing being primary.

I've never had a claim of any kind, but due to owning more than one vehicle per person am classified as "high risk".  Even in that status I can get it, but it's price prohibitive.
Title: Re: Umbrella insurance
Post by: MishMash on April 16, 2020, 09:22:35 AM
we have a 3 million dollar umbrella through USAA. We pay about 500 a year for it, the first million in coverage is usually the most expensive.  You generally have to have your umbrella through whoever insures your house and car because they mandate minimum main coverage.  Anything you want covered in the event of the accident via the umbrella has to be with the same insurer. 
Title: Re: Umbrella insurance
Post by: terran on April 16, 2020, 10:16:42 AM
Most insurers will only issue an umbrella in conjunction with auto or homeowners, because that's generally where big lawsuits are involved.  It also has practical implications: an umbrella may start at damages above $100k, for example, because it assumes another underlying policy has coverage up to that point. Here is an older article, but with some alternatives:

https://www.irmi.com/articles/expert-commentary/comparing-stand-alone-personal-umbrella-policies

Geico is an exception because they don't sell homeowners/renters directly, although they do sometimes act as an agent.
Title: Re: Umbrella insurance
Post by: FireAnt on April 16, 2020, 11:52:16 AM
So I called Geico vs. emailing them and got a quote. $263 for a 1 million dollar policy. Now I'm wondering if that is in line with what others pay?

ETA: I asked if my car accident has something to do with the rate. Definitely. It would have been $160/year. Need to wait another 1.5 years before it falls off.
Title: Re: Umbrella insurance
Post by: WSUCoug1994 on April 16, 2020, 12:03:47 PM
$3M with AAA - $504 a year.
Title: Re: Umbrella insurance
Post by: Fishindude on April 16, 2020, 12:21:43 PM
So I called Geico vs. emailing them and got a quote. $263 for a 1 million dollar policy. Now I'm wondering if that is in line with what others pay?


Yea, an umbrella policy is not all that expensive.
Title: Re: Umbrella insurance
Post by: terran on April 16, 2020, 01:25:51 PM
So I called Geico vs. emailing them and got a quote. $263 for a 1 million dollar policy. Now I'm wondering if that is in line with what others pay?

ETA: I asked if my car accident has something to do with the rate. Definitely. It would have been $160/year. Need to wait another 1.5 years before it falls off.

We're at $118 with Geico, but we also only have one car (can't both be driving at once) and our car insurance is cheaper than I expected (I think it might be related to where we live now). I think car accidents are the most likely cause of an umbrella claim, so it would make sense that the two would go hand in hand. So I'd say your current quote is on the high side, but that's obviously due to the car accident if it will come down when it falls off and that quote is in line with what I would expect. I think it's close to what our non-Geico renters insurance company quoted.
Title: Re: Umbrella insurance
Post by: BlueMR2 on April 17, 2020, 02:45:21 PM
Lowest quote I got was $780 and they went up from there (I think $1100 is the highest so far) for $1 million.  I really need to sell a couple cars...  :-O
Title: Re: Umbrella insurance
Post by: Goldendog777 on April 17, 2020, 02:56:02 PM
We have our auto insurance and umbrella policy with Geico.  Itís $293 for a $1M in our area.  They base it off our 2 cars ($125 each) and $43 for our primary residence.
Title: Re: Umbrella insurance
Post by: des999 on April 17, 2020, 03:33:52 PM
I actually just got it recently, bundled with NW car and auto for $263 for 1m.

Title: Re: Umbrella insurance
Post by: herbgeek on April 17, 2020, 03:41:05 PM
We have a 2MM policy through Travelers and it cost us $319 this year.
Title: Re: Umbrella insurance
Post by: LightStache on April 25, 2020, 08:09:39 AM
$1M USAA = $173/yr. I have rental property, renters liability, auto, and life insurance policies with them -- basically everything -- so maybe that's why I get the low premium even though I'm relatively high risk.
Title: Re: Umbrella insurance
Post by: iris lily on April 26, 2020, 12:49:27 PM
Most insurers will only issue an umbrella in conjunction with auto or homeowners, because that's generally where big lawsuits are involved.  It also has practical implications: an umbrella may start at damages above $100k, for example, because it assumes another underlying policy has coverage up to that point. Here is an older article, but with some alternatives:

https://www.irmi.com/articles/expert-commentary/comparing-stand-alone-personal-umbrella-policies
Yes. Get it, it is cheap.
Title: Re: Umbrella insurance
Post by: spartana on April 26, 2020, 03:42:30 PM
State Farm. Approx $200/year for a one million dollar policy. Bundled with homeowners and a non-vehicle-owners liability policy (don't own a car but rent or borrow one sometimes).
Title: Re: Umbrella insurance
Post by: ericbonabike on July 01, 2020, 07:09:05 AM
If you live simply, how will anybody know you have money?  I drive a used car, live in a 1600 sq foot home.  So, if I were in an accident, and I was found at fault, and I hit a car full of executives, how would they have the insight to pursue an expensive lawsuit against somebody who looks like they make $40,000 a year, but is worth a million or two?


Also, to what extent are your retirement (401k & IRA) protected from lawsuits?  If 90% of my wealth are in these, would they be sufficiently protected from a random lawsuit?
Title: Re: Umbrella insurance
Post by: hops on July 01, 2020, 08:20:27 AM
If you live simply, how will anybody know you have money?  I drive a used car, live in a 1600 sq foot home.  So, if I were in an accident, and I was found at fault, and I hit a car full of executives, how would they have the insight to pursue an expensive lawsuit against somebody who looks like they make $40,000 a year, but is worth a million or two?

We live simply, in a house half the size of yours, and no one would glance at us or our vehicles and think we have money. But if they (or their lawyer) Googled my wife's name they'd immediately assume she's loaded on the basis of her job. We're happy to have our inexpensive umbrella policy.
Title: Re: Umbrella insurance
Post by: sparkytheop on July 01, 2020, 11:53:19 AM
Anyone who knows where I work knows I get paid well...

I pay about $220/year for umbrella insurance.  I got it because I have 9 acres where I have some people doing work.  Some will carry insurance, others don't (like an amazing guy who is currently cleaning up acres of crap that was left on my land for a very, very reasonable price).  If he, or a friend, or another person I hired were to get hurt on that property, I want to make sure I'd be covered.  Not that a friend would sue me, but if they got hurt and required hospitalization, whatever, I'd want to know I could cover their medical bills.

And, also, all the other reasons people get umbrella insurance. 
Title: Re: Umbrella insurance
Post by: BeanCounter on July 01, 2020, 01:55:35 PM
We have a $1M policy through State Farm for $137 annually. Bundled with our home and auto. Trying to decide if we really should increase to $2M as our net worth is getting closer to $3M.
Title: Re: Umbrella insurance
Post by: spartana on July 01, 2020, 02:55:47 PM
If you live simply, how will anybody know you have money?  I drive a used car, live in a 1600 sq foot home.  So, if I were in an accident, and I was found at fault, and I hit a car full of executives, how would they have the insight to pursue an expensive lawsuit against somebody who looks like they make $40,000 a year, but is worth a million or two?


Also, to what extent are your retirement (401k & IRA) protected from lawsuits?  If 90% of my wealth are in these, would they be sufficiently protected from a random lawsuit?
I believe 401ks are protected from a law suit but IRAs are not. And of course other investments and saving aren't protected and I believe they can put a lien on your home or possibly force a sale. Then there is garnishment of wages. So I think an umbrella policy is important if you have a sizable NW even if much of it is tied up in investments or home equity.

As for living simply or even poorly that's not going to matter. Its pretty easy for a lawyer or insurance company to figure out your total NW and how its held. Its a cheap insurance too. I think MMM should have both HO and umbrella given his NW and earning potential.