Author Topic: Umbrella insurance questions and help  (Read 1465 times)

Swat

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Umbrella insurance questions and help
« on: January 22, 2017, 09:20:14 AM »
I'm looking into umbrella insurance for the first time. Currently I'm a medical resident and have low assets now but the potential for significant salary and net worth accumulations in the next 10-20 years. Already have life/disability setup.

1) How much to get? I've seen people suggested your current net worth but my understanding is that they can go after future earnings as well and physician's often have a "target" on their back. Have heard anywhere in the neighborhood of 1-5 million since it is relatively inexpensive.
2) Which company to get it from? For life insurance I went to "terms4sale" to evaluate but wasn't sure if there was something like that for umbrella insurance. Are there specific companies to choose from that are considered better?
3) Has anyone experienced discounts with umbrella insurance if you carry multiple policies with the same insurer? If I carry life/disability/rental/automobile with one company, are there discounts if I get my umbrella policy with the same company?
4) Do you typically "lock in" a lower rate by getting it younger? For instance, with disability insurance it is much cheaper to buy younger when healthy and continue to pay the premiums without having to take another physical. Is it similar with umbrella insurance? Is it locked in once I buy it at that rate even if 5 years down the road I choose to start drag racing or some other risky activity?

supermustacheman

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Re: Umbrella insurance questions and help
« Reply #1 on: January 22, 2017, 10:05:45 AM »
i have my umbrella insurance through geico.  i think i get discounts since i am also an auto insurance customer and i have home insurance through their third party liberty mutual.  i've always been pretty happy with geico, but i may be biased because i am a longtime berkshire hathaway shareholder.

SimpleCycle

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Re: Umbrella insurance questions and help
« Reply #2 on: January 22, 2017, 11:49:25 AM »
Every company we got quotes from required we have at least our auto insurance with them, so you have no choice but to bundle.  We got ours at Geico.

We have about double our net worth.  It is not expensive, but I also didn't want to overinsure.

I don't think there's much advantage to getting it young.  I also believe that professional liability is excluded, so while you could be targeted because of your occupation, it shouldn't actually subject you to additional liability.

mjs111

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Re: Umbrella insurance questions and help
« Reply #3 on: January 23, 2017, 10:10:35 AM »

1.  How much to get is largely based both on how much you have and how much typical lawsuits are.  If you have no money and largely have no prospects for ever getting money, there's not really any need for umbrella insurance.  Yes, future earnings can be gone after. As a doctor you're a nice target for something like that. Most lawsuits seem to be in the $1-$3 million range and settle for much less.  Combining these two realities, getting a $2 million policy that sits on top of your auto and homeowner's/renter's insurance policies (which would give you around $2.5 million in coverage) would be a nice setup for where you are now, and you can always increase later for very little extra money. For example, increasing a $2 million policy to $3 million might only cost an extra $120 a year.

2.  I shop this around.  Currently I have all of my insurance policies with GEICO and I really like them.  I'm also a Berkshire shareholder so I get an 8% discount.  GEICO's prices and service are hard to beat.

3.  Yes, you typically get discounts keeping all your insurance with the same insurer. Some insurers may not even want to write you an umbrellla policy if you don't have your auto and homeowner's/renters insurance with them. The reason here is that the umbrella policy sits on top of these policies so the umbrella insurer depends on the auto and homeowner's insurance to be well underwritten to minimize losses to the umbrella.  Many insurers just feel better and more comfortable if they're in control of the whole process.  Probably works out better for the client too.  If you hit someone's Ferrari and give them back trouble you could easily get a judgement that eats into your umbrella.  If you have this all with the one insurer you won't have to involve yourself with coordination between insurance companies.

4.  Nope, you pay umbrella insurance annually, like you do auto and homeowner's. It's not like term life insurance where you lock in a lower rate for a long time.  Things that would really boost your umbrella premiums are owning certain breeds of dogs that have histories of attacking people, owning power boats, owning ATV's, flying airplanes, stuff like that.  These things will either hike your rates or you could get a lower rate by getting an exclusion, i.e. your umbrella covers everything EXCEPT your power boating.

 

Spork

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Re: Umbrella insurance questions and help
« Reply #4 on: January 23, 2017, 10:16:35 AM »

I have it through my regular insurance company.  Mine is Allstate if that matters, though it's probably best to just get quotes from lots of people rather than go off of a specific recommendation.

You probably want it from your regular insurance company, as the umbrella coverage has requirements for minimums on home/auto liability.  In other words, you may have to up your coverage on those if you don't meet their minimums.  If you were to try to get it from a different company, you'd likely have to provide proof of hitting their minimum coverage.