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Insurance: umbrella policy?
Posted by: space-time
Date: January 04, 2020 11:34AM
do you have an umbrella policy? what does it cover and what does it cost you?

what is the best place to start looking into such insurance? I think an insurance agent may try to oversell. Should I consult a lawyer or a financial advisor to see how much coverage I should get?
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Re: Insurance: umbrella policy?
Posted by: mattkime
Date: January 04, 2020 11:49AM
I have an umbrella policy that covers $1 million in above and beyond home owners and auto insurance. It costs me $70 a year. I think its worth it.

I found an agent that was personally recommended to me and he hasn't oversold me. I actually like him. I didn't consult anyone regarding how much coverage I should get (maybe I should?) since I thought the policy seemed like a good deal.

but insurance rates can vary significantly across the country and across providers. I have Erie insurance.



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Re: Insurance: umbrella policy?
Posted by: Forrest
Date: January 04, 2020 11:55AM
Early Retirement forum is a good source of info on umbrella insurance.
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Re: Insurance: umbrella policy?
Posted by: macphanatic
Date: January 04, 2020 12:05PM
Umbrella coverage tends to be much cheaper than increasing standard policy limits. I lowered my home and auto liability limits and added more umbrella coverage to offset the reduction. Wound up saving several hundred dollars per year. I got my umbrella coverage thru the same carrier as my home and auto to eliminate any gaps in coverage and potential claims issues.
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Re: Insurance: umbrella policy?
Posted by: space-time
Date: January 04, 2020 12:14PM
interesting. Thanks for your comments.
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Re: Insurance: umbrella policy?
Posted by: mattkime
Date: January 04, 2020 12:14PM
bogleheads.org is a good place to get financial advice as well



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Re: Insurance: umbrella policy?
Posted by: DeusxMac
Date: January 04, 2020 12:15PM
The real test though is - How, when (and will) they actually pay out in response to a valid claim.
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Re: Insurance: umbrella policy?
Posted by: Gareth
Date: January 04, 2020 12:19PM
Quote
mattkime
I have an umbrella policy that covers $1 million in above and beyond home owners and auto insurance. It costs me $70 a year. I think its worth it.

Wow, for $70 a year, that's definitely worth it. Of course price will vary greatly depending on an individual's particular risks.

As a useless point of comparison, a $2 million policy is $502 a year for me ($287 for $1m), but back when my wife was only covering her house and 1 car, a $1m policy was $140ish/year for her. So you can see there's a great variation.

Quote
macphanatic
I lowered my home and auto liability limits and added more umbrella coverage to offset the reduction.

Interesting, the two carriers I've spoken to (State Farm and USAA) both require auto liability to be about 250/500, which might require raising your limits before getting the umbrella policy.
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Re: Insurance: umbrella policy?
Posted by: NewtonMP2100
Date: January 04, 2020 12:22PM
.....under your umbrella.......ella......eh.....eh......???



_____________________________________

I reject your reality and substitute my own!
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Re: Insurance: umbrella policy?
Posted by: rz
Date: January 04, 2020 12:48PM
Had one on a rental condo we used to own. Peace of mind in case a tenant tried to sue us.
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Re: Insurance: umbrella policy?
Posted by: space-time
Date: January 04, 2020 12:54PM
Quote
rz
Had one on a rental condo we used to own. Peace of mind in case a tenant tried to sue us.

I don't have a rental, but yeah, I want piece of mind for similar situations.
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Re: Insurance: umbrella policy?
Posted by: Harooneneutics
Date: January 04, 2020 01:02PM
I have a $1 million umbrella policy that is supposed to cover personal liability beyond auto and homeowner's insurance. The company (Erie) describes it as "Personal Catastrophe Liability Insurance," so basically it's for use in a major crap-hitting-the-fan situation.

It's about $150/year. My agent suggested it to me during an annual review of my policies a couple of years ago. I'm a terrible comparison shopper so there might be better deals out there. Erie has been fine to deal with on a couple of auto claims.

The policy that I have doesn't cover any professional liability.
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Re: Insurance: umbrella policy?
Posted by: macphanatic
Date: January 04, 2020 01:43PM
Quote
Gareth
Quote
mattkime
I have an umbrella policy that covers $1 million in above and beyond home owners and auto insurance. It costs me $70 a year. I think its worth it.

Wow, for $70 a year, that's definitely worth it. Of course price will vary greatly depending on an individual's particular risks.

As a useless point of comparison, a $2 million policy is $502 a year for me ($287 for $1m), but back when my wife was only covering her house and 1 car, a $1m policy was $140ish/year for her. So you can see there's a great variation.

Quote
macphanatic
I lowered my home and auto liability limits and added more umbrella coverage to offset the reduction.

Interesting, the two carriers I've spoken to (State Farm and USAA) both require auto liability to be about 250/500, which might require raising your limits before getting the umbrella policy.

Note that I didn't say what I lowered them to. Anyone who buys low limits is not very bright in my opinion. State minimums would bankrupt most Americans with one serious incident. Most people don't realize that they are on the hook for what insurance doesn't cover. In most states, the minimums won't cover replacement of many on the newer vehicles on the road. And they won't cover most medical needs.
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Re: Insurance: umbrella policy?
Posted by: Michael
Date: January 04, 2020 01:47PM
We have a 2 million policy that costs $320 a year. A 1 million policy was something like $270 a year so we went up for a pretty small increase. It covers us for the normal liability issues that we all know of but also for liability associated with being on a board or doing volunteer work. It also covers us when we're out of the country for liability issues.
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Re: Insurance: umbrella policy?
Posted by: GGD
Date: January 04, 2020 02:23PM
From what I recall, rates will depend a lot on the number of cars/drivers in the household.
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Re: Insurance: umbrella policy?
Posted by: Forrest
Date: January 04, 2020 03:04PM
From what I've read, umbrella insurance is different from most insurance because it's basically paying for a high priced lawyer so you don't have to pay a settlement.
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Re: Insurance: umbrella policy?
Posted by: sekker
Date: January 04, 2020 06:10PM
I signed up for my first umbrella last year via State Farm. Seemed reasonable, but it DID require we up our auto insurance a bit. I had a warning from a frivolous lawsuit (that we we able to de-escalate) to get me to sign up. $1M for ~$100/year sounds right.

My employer offers a new, prepaid legal 'insurance' option this year. I signed up with the goal of getting our will and some related documents together - those alone are worth the annual fee.

So I think there are different options to solve this issue of large-scale legal bills, even if you are in the right.
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Re: Insurance: umbrella policy?
Posted by: Frank
Date: January 04, 2020 07:09PM
Quote
Michael
We have a 2 million policy that costs $320 a year.

I just paid mine ... $328 for 2 million with Sate Farm. Think I'll check to see what 3 million would cost.
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Re: Insurance: umbrella policy?
Posted by: Don C
Date: January 04, 2020 07:41PM
My Auto-Owners policy is for $1M and costs $150 a year (premium is coming up in a week or two).
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Re: Insurance: umbrella policy?
Posted by: space-time
Date: January 04, 2020 08:00PM
Quote
Don C
My Auto-Owners policy is for $1M and costs $150 a year (premium is coming up in a week or two).

is this $1M just the umbrella part, or is this your Auto insurance? I am confused since you mention Auto-Owners. I assume the auto insurance is separate and this $150 is only the umbrella to cover the difference to 1M.
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Re: Insurance: umbrella policy?
Posted by: Filliam H. Muffman
Date: January 04, 2020 09:47PM
Yes. About $1 per $10,000 with State Farm.



In tha 360. MRF User Map
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Re: Insurance: umbrella policy?
Posted by: Don C
Date: January 04, 2020 11:44PM
Quote
space-time
is this $1M just the umbrella part, or is this your Auto insurance? I am confused since you mention Auto-Owners. I assume the auto insurance is separate and this $150 is only the umbrella to cover the difference to 1M.

The $150 is only the umbrella policy. Auto and home are separate policies (and premiums).
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Re: Insurance: umbrella policy?
Posted by: Bill in NC
Date: January 05, 2020 11:11AM
Quote
Forrest
From what I've read, umbrella insurance is different from most insurance because it's basically paying for a high priced lawyer so you don't have to pay a settlement.

You're paying for the insurance company's lawyers to negotiate a settlement within the policy limits.

The limits usually stack, e.g. if you have $500k in auto insurance (required by my insurer before they'd write an umbrella policy) and $2 million in umbrella your total coverage is $2.5 million.
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