Umbrella varies per location, it’s more costly in my state even I bundle with everything.
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How would someone know you had an umbrella policy…before they sued you.
Presumably having money makes people more likely to sue you. As a law school professor told us: sue solvent parties.
I have an umbrella policy through work. $5 million. And can buy an additional $5 million for under $1000.
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I’m not an export on legal issues. My novice assumption is that the opposing attorney can determine whether or not you have good assets and umbrella policy, but not sure if true.
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The umbrella policy comes with attorneys (who don’t want to payout their company’s money) to represent you.
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We have an umbrella policy. I have always understood that the value of the policy is not the coverage as much as it is having the lawyers from the insurance company that do not want to pay out so they defend you.
On the other hand, I have read that virtually no one ever uses either an umbrella policy.
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Umbrella policies often come into play when there is an accident involving multiple injured people, particularly if there are deaths or paralysis involved. This type of policy also affords insurance for claims such as libel and slander, coverage which is not usually provided by a homeowners policy.
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Some states (FL is one) require an insurance company to disclose its insured’s policy limits and defenses to coverage when requested by the injured party. It is not necessary for suit to have been filed. The first letter an attorney typically sends to the at fault party requests that that person get their insurance company involved. Accident reports often identify the insurers so the attorney may go directly to the insurer.
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When determining amount of umbrella coverage do you include cost of your primary residence? Here in CA it can easily be over 1 mil
Timely discussion. With my newer car, I dropped my previous insurance and went with Geico to save a good deal of money. Even my agent sympathized, knowing that I was saving hundreds. My house is still insured with the older and more local company. This am they sent an email that my umbrella policy will be dropped as I no longer have car insurance with them. Time for shopping around perhaps…or just return and suck it up for the car insurance?
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We never did include residence and don’t have umbrella policy mapped to our net worth. But it wouldn’t be a bad idea to do that. Now that we are older it’s a non-issue as even if the worst were to occur they could only attach to 7 years of income max.
We’re in the process of figuring out the next set of protection devices ( trusts, etc) as we age. So the money is protected for us and for our kids. That is, if we don’t spend it all.
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I included my residence, but there are those who question the need for the amount of the umbrella to cover all of your assets. Some suggest that you simply want access to the lawyers who will go to bat for you.
I am less concerned now that my children have graduated college and out of my house.
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In theory, umbrella insurance should cover your net worth, but I already have large umbrella insurance and my net worth has gone up significantly, so I didn’t change. I think it’s enough that the attorneys for the insurance company will fight tooth and nail for it.
But my real estate properties are in a trust, not sure if that helps deter anything, but I’m at the stage I worry less and enjoy life more.
Preferably when I go, I should be able to donate a large sum to my favorite charities, but only until after my husband and I are gone, we told the kids to donate to so and so because they these organizations made a difference to our lives.
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I’m in the same boat. I just don’t want a seven figure attorney bill. We have a good friend who is a business attorney and gives us huge discounts. But for that type of lawsuit, I can see losing all our assets to the legal defense. A nightmare that will keep my umbrella policy going forever.
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Right. But would a claimant know if you had an umbrella policy before deciding to sue you? That was my question.
We have umbrella coverage. So do our kids.
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And my insurer would give out the details of my coverage?
It depends on the state. In some states an insurer is required by statute to disclose the limits of insurance when requested by a claimant or their attorney. Where this disclosure is not legally required the limits may not be known to the claimant, now plaintiff, until after suit is filed and discovery is conducted.
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California is not one of them, but Colorado and New Jersey are, this according to my googling.
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Do your young adults who are high earners but don’t own car or house yet have umbrella insurance? The insurance agent told me that DD who is not living with us but sometimes borrows our car when she is in town is covered under our car and umbrella insurances while driving our cars. I wonder if she needs to have umbrella insurance of her own if she doesn’t have a car
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