Do we need umbrella insurance?

[Anonymous]

We had umbrella insurance through USAA (can't recall what we paid). When we got it, I remember the agent stressing that it's only recommended for people with assets over $1M and I had to go through our assets to explain that we did have over that amount. DH was in a minor accident (with a pole in his parking garage) and had a couple of speeding tickets via D.C. cameras and so they cancelled our policy. I haven't pursued it through another agency, although perhaps I should.

[Anonymous]

Insurance is a scam and waste of money. Don't fall for it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's way cheaper than you probably think. I pay $100-150 a year. I can't remember the limit but I know it's at least $1M. Totally worth it.

Ours is $158/year for $1M from Geico.

That rate seem awesome (and low) to me. We have a Geico umbrella, just increased it to $5M, and I think we pay about $1250 (and I thought we paid just under $1000 when our coverage was $1M).

That is really expensive. My $5M policy is $600/yr through allstate

[Anonymous]

Anonymous wrote:We have $3m in coverage and a HHI of 250k - I don't see why people go without it.

We go without it because you can't get coverage if either if you work in journalism.

[Anonymous]

In our case we have HHI of about $180k are renters and don't have a car (use metro or taxis). Assets are about 1M, what type of policy would we need if any?

[Anonymous]

I'm not sure you'll need any insurance...

[Anonymous]

Your homeowners insurance has some liability insurance, likely over $200k. And your auto insurance probably has about $350k of liability for an auto accident. In case of suit, the plaintiff's lawyers won't go after money that isn't there - so if you don't have $1 million, they won't go after a million. They will go after what you have. Umbrella will kick in after you exhaust homeowners and auto (depending on where/how the accident occurs).

Unfortunately, I think 22:51 is correct - the more you have, the more they will go after you, and I'm not sure how it will protect that. But rule of thumb is to cover as much as your net worth. Since your net seems to be $200k, you are likely covered already by your homeowners and don't need additional coverage.

[Anonymous]

16:56, you have an interesting situation; enough assets to make it tempting for someone to go after you but no overall insurance from a home or car. I'm not sure what to advice you

[Anonymous]

What if most of your net worth is the dough in 401ks? Is that protected at all from potential lawsuits like these?

What about home equity?

[Anonymous]

Anonymous wrote:What if most of your net worth is the dough in 401ks? Is that protected at all from potential lawsuits like these?

What about home equity?

401ks are protected. Home equity may or may not depending on state law-- I think in MD it isn't really

[Anonymous]

Anonymous wrote:You want at least a million umbrella policy that you can get for $300 per year or so. At the same time you may be able to reduce auto liability coverage, since some is now under the newly-purchased umbrella, saving some money. I have 2 million for $400 a year. The incremental premium above for a 1 million policy is not that great.

I would still keep auto liability high. I do 1mm fir that plus another 1mm umbrella.

Note that to get the umbrella, most companies are going to require you insure your house and cars through them. Mist people use 1 ins co anyway, but just calling that out in case you don't.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have $3m in coverage and a HHI of 250k - I don't see why people go without it.

We go without it because you can't get coverage if either if you work in journalism.

Our insurers have never asked our occupation (geico or State Farm)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's way cheaper than you probably think. I pay $100-150 a year. I can't remember the limit but I know it's at least $1M. Totally worth it.

Ours is $158/year for $1M from Geico.

That rate seem awesome (and low) to me. We have a Geico umbrella, just increased it to $5M, and I think we pay about $1250 (and I thought we paid just under $1000 when our coverage was $1M).

That is really expensive. My $5M policy is $600/yr through allstate

I just got renewal papers for our $5M/$1400per year coverage from GEICO and trying to figure out if this is reasonable. We've had GEICO for 20 years, they insure our house and 4 cars with 3 age 16-21 yr old drivers (including an expensive auto claim from one of our "youthful operators"). I'm guessing the 16-21 year olds can more than double the rate (as they did with the car insurance we carry)? Anyone else with teens who could confirm this? Thanks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Hell yes. Protect what you have. It costs next to nothing.

I guess I am just not clear how it protects anything. If someone ends up having a fall on your property and becomes paraplegic, a million dollar policy is not going to cover you sufficiently. Their lawyers find out your net worth, and how much your insurance is, and they come after the lot. So while it would cover some circumstances, it would not cover all.

If your coverage is 2 million and your net worth 1 million, a 3 million judgment would still wipe you out.

That assumes no litigation risk. Also, your insurer is looking at exposure of more than $2 million on these facts, because they have to pay the legal defense fees too. There is a lot of incentive for both sides to settle at or near the policy limit. Also, if you go to $5 million rather than $2, which is not all that expensive because each incremental dollar of coverage costs less -- at least until you are outside the standard range -- the insurer has a lot more skin in the game and will likely be more aggressive in defending the claim, to your benefit. This coverage is generally inexpensive, and while you are very unlikely to need it, if you ever do and don't have it, you are looking at bankruptcy.