Umbrella Insurance...anyone have it?

[rennigade]

We just recently signed up for umbrella insurance. $124/year for a $1,000,000 policy. Reason its so cheap is the likely hood of having to use it is very slim. We figured it was a small price to pay for peace of mind.

Should everyone have umbrella insurance...nah. We're getting close to reaching the top of the $1,000,000 net worth mountain...not to mention future earnings are also protected. I never calculate real estate for net worth but have to for this insurance.

I guess the better question is...is there any reason not to pay for umbrella insurance if you have a high net worth considering its so cheap?

[Jluke]

***by no means an expert on umbrella insurance****

Certain assets may be protected, depending on the state you live in.

you would want to look into that for your state to see if those items where most of your net worth comes from are already protected (IRA, 401ks, home equity).

[TexasHusker]

I have it because it's so cheap.

[rennigade]

I have it because it's so cheap.

That and having all those rental properties...seems like a no brainer.

[Jluke]

That and having all those rental properties...seems like a no brainer.

there's personal umbrella insurance...

and then there is umbrella insurance for businesses.

[rennigade]

there's personal umbrella insurance...

and then there is umbrella insurance for businesses.

Ah...good to know...I didnt know there was a difference.

[Thrif-t]

Wow I have it and its not that cheap! I'm thinking somewhere between $300-$350 yr. for million dollar coverage. Maybe because I have 3 teen drivers??

[~bs]

Yeah, I have an umbrella policy. I actually think most people should have one, even if they're not a high net worth individual (moreso if they are). Even if you're a poor college student with no money, you can still be sued and be at fault for something, and have to end up paying through wage garnishments until the amount you owe is paid up.

[~bs]

Wow I have it and its not that cheap! I'm thinking somewhere between $300-$350 yr. for million dollar coverage. Maybe because I have 3 teen drivers??

probably. if you have multiple drivers its covering, a bad driving record, or worse a dui, the cost will either go through the roof or be denied because you're too high a risk.

in your case, you have 4 drivers covered under the policy, which explains the cost.

[~bs]

there's personal umbrella insurance...

and then there is umbrella insurance for businesses.

you can have the policy cover both. it really depends on the policy written. Especially if you have a rental, it really is a good idea to have an umbrella.

[~bs]

***by no means an expert on umbrella insurance****

Certain assets may be protected, depending on the state you live in.

you would want to look into that for your state to see if those items where most of your net worth comes from are already protected (IRA, 401ks, home equity).

401ks are generally specially protected against lawsuit. IRAs and all other assets have lesser or no protection, but this can vary depending on state.

having large retirement assets and not an umbrella insurance is pennywise and pound foolish. You're risking the entire enchilada over 1 pinto bean.

[TexasHusker]

Here's the deal: An umbrella can break at the most inopportune times. I lost a golf umbrella to wind and two compact ones destroyed by pets. Had I been smart and had an umbrella policy I would have been a lot better off.

[LivingAlmostLarge]

$150/year for $1 million. We've always had one since we bought a condo and tied our fate to others. We kept it now I wonder if it's necessary.

[rennigade]

$150/year for $1 million. We've always had one since we bought a condo and tied our fate to others. We kept it now I wonder if it's necessary.

Well you know how insurance works. You hope you never have to use it.

I have two friends who had a kid almost a year ago. I asked them if they were getting life insurance (they are responsible with money...save/max 401/max roth/etc.) They didnt want to spend the couple hundred a year for a $500k policy for each just as a safety net. Now if one of them dies they wont lose the condo..but they'll be tapping into their savings to cover everything. In a couple years it will be gone.

^Not sure why anyone especially smart responsible people would put themselves in this position?

[Joan.of.the.Arch]

We have an umbrella policy since five years ago when we signed a lease to garden on land owned by the city. The city did not require insurance, but I was really uneasy having responsibility for a lot where I really did not even have a way to control whether people come and go from it. We cleaned up the lot better than the city had it; removed all things that might trip someone, cut out dead limbs that might fall on someone; never leave tools laying about; etc. But I was uneasy about the possibility of someone finding a way to get hurt there and sue us. So...umbrella policy.

Recently, the city has begun requiring insurance and helped form a pool of leasers to get better insurance rates without going through a lot of hoops. However, did the city even tell us about the program? Nope, evidently they just give out the info at lease signing. I'll have to inquire

Anyway the umbrella policy gives me some peace of mind.