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Talk to me about Umbrella Policies

5,287 Views | 46 Replies | Last: 7 yr ago by Pepper Brooks
jakester03
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AG
Family of 3, own home and 2 cars, regular job plus small side business. Right now I have homeowners, auto, and business insurance. Wasn't sure if I sure start looking at an umbrella policy too.
The Wonderer
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AG
Typically cheap insurance. They only cover certain acts/instancecs - especially on the commercial side.
MemphisAg1
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I've got one with broad liability coverage, except for criminal acts, etc. It's supplemental liability insurance beyond what's in my auto or home policies. A good thing to carry when you get to the point in life that you're accumulating wealth and want to be protected from unforeseen accidents. Especially worthwhile when you have teenage drivers. Inexpensive. $450/yr for $1,000,000 coverage.
Bassmaster
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I would shop that premium. I pay half of that. I suppose it could be geographical differences, but that seems extreme.
Sazerac
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AG
my umbrella is $174/yr from AMICA
Beckdiesel03
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AG
Yea we cover 3 cars and had a boat now a UTV and don't pay close to $450 for 1,000,000.
Ronnie
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"Memphis" ag might not be in Texas
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IDAGG
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It also varies with how many drivers you have and their age. My relatively inexpensive umbrella policy went up noticeably when my first child hit 16 years old. Then it went up again when the second child hit 16 years old. Two teenage drivers will absolutely increase the risk of underwriting that policy.

If any of you are aware of teenage drivers and their propensity to get in wrecks you will understand why. And as another poster mentioned, I am sure it varies by location as well.


And edit to add, absolutely get an umbrella policy to protect your assets. I believe mine was around $300 to $350/yr for $1M coverage before my sex trophies became drivers.
Casey TableTennis
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Be aware that an umbrella policy has "required" limits for your underlying coverages (auto, HO, etc...). You may have to increase the liability coverage on some of those too in order to avoid a big hole in your coverage. That may increase your cost beyond simply the cost of adding an umbrella.

Not all umbrella's are the same. For example, not all come with extension for un/underinsured motorists. Like anything, shop around not just for cost, but what you are getting.

If your agent isn't proactively addressing these topics, I would encourage you to explore other agents/brokers.
CS78
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Are there any companies that will just sell you a blanket liability umbrella coverage? I use USAA and farmers for insurance. Each will only give you an umbrella policy on the same things they are already covering. And they will only do so if they have your homeowners. I have 10 rental houses with usaa because they are cheaper but that's the max they will cover. Remaining rentals are with farmers. Havent been able to figure out how to get umbrella coverage for everything.
DadAG10
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Bassmaster said:

I would shop that premium. I pay half of that. I suppose it could be geographical differences, but that seems extreme.
Teenagers will typically add $100+ each.

Also could be more toys/vehicles.
MemphisAg1
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Good feedback from others. I had 3 male teenage drivers at one time, so a lot of potential risk. They're all on their own policies now, so I need to check the premium again. I do want a broad policy with essentially no exclusions (except for criminal behavior) and am willing to pay a little more for better coverage.
10andBOUNCE
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Not an expert but had always heard its typically overkill if you don't have a good amount of assets to protect (>1m)
Casey TableTennis
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10andBOUNCE said:

Not an expert but had always heard its typically overkill if you don't have a good amount of assets to protect (>1m)
I'm not a P&C Agent, but there are some big benefits to having it in place regardless of asset level. One of the biggest is that you have someone else paying legal fees if you ever have an event that would run through one of these policies.

Getting an umbrella isn't a first priority for most people, but it shouldn't be too far down the list once basic needs are addressed.

Pepper Brooks
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It's catastrophic liability insurance. Heaven forbid you hit someone with a million comorbidities and turn them into a quadriplegic. That 250k in underlying limits goes real quick.

TLDR - buy it regardless of asset level
JustPanda
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TXAGBQ76
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I'm in sales and have factory folks and customers in my car a lot. It will be useful if (God forbid) some type of accident occurs and they are injured, maimed or worse.
DrewAg27
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Excess liability is very inexpensive. Make sure at minimum you have covergae meeting or exceeding your seizable assets (defined by state). Umbrellas come in different flavors to cover different exposures. Commercial, personal, farm and ranch. Don't assume that your personal umbrella will cover your 1,000 acres or your 30 rent houses. If the exposure is not calculated into the premium there is a good chance that exposure is excluded. Also, if the entities you own are endorsed under the umbrella remember that you are splitting the umbrella limit between yourself and the entity.
Clavell
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Ok have decided to get umbrella, but for how much? For $1M or if net worth is above that for the amount of the net worth?

Let's say they want to sue for as much as they can get (don't they all?). Then it seems they would sue for whatever the umbrella would cover plus your net worth so the umbrella really doesn't protect net worth.

Ex. Net worth $3M
$1M umbrella so would sue for $4M
$3M umbrella so would sue for $6M

What am I missing, seems no reason to get more than the $1M umbrella
Casey TableTennis
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Agents I've visited with about this recommend higher of $1,000,000 or NW. While not all of the NW is attachable, judges apparently look at covering to that level as prudent and rarely set judgements above that. There are certainly exceptions, but I would start the conversation there.
Clavell
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Interesting. Guess my lack of trust in legal system makes me skeptical.
MemphisAg1
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Talked to my insurance agent and he had the same advice of keeping coverage roughly equal to net worth. Could be insurance salesman spin, but it seems to make sense.
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JustPanda
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Amen!
JustPanda
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MemphisAg1
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Fortunately, lawsuits aren't decided based solely on what the prosecutor wants. Juries and judges have a role to play also, and actual damages are usually relevant, not simply how much insurance and assets you have.

The minimal extra cost for enough insurance to cover my assets is worth the peace of mind. If an actual judgment against me is greater than my insurance, then I'll deal with it when it occurs.
SACR
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If you have over $1 million in assets, you should get an umbrella policy.

Reality is, some people are freaking leeches who will try to get a dollar any way they can. If you get into a car accident and are at fault, you don't want someone to be able to come after everything you've worked for in your life.
DadAG10
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jake2011 said:

You guys are an insurance agents dream customer.
Because those guys are getting rich off those $200-$300 policies.

Right.
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JustPanda
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JustPanda
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MemphisAg1
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The premium per million dollars goes down as coverage increases. That's because most claims are toward the smaller end. And it directly refutes the notion that plaintiffs' attorneys will simply capture all the additional coverage of an insured, because if that was the case the premium would be the same for each million dollar increment of coverage.
Clavell
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As example, $1M quote for $175 and $3M quote for $400
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