Reply to Do we need umbrella insurance?

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Reply to "Do we need umbrella insurance?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Hell yes.  Protect what you have.  It costs next to nothing.[/quote]

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.[/quote]

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.  [/quote]

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