Umbrella Insurance Policy

[srblanco7]

I just renewed our family's umbrella insurance policy for $5M. It's not an inexpensive policy, roughly $1k, noting that the cost of the policy is somewhat escalated given that we have an 18 yo driver in the house (and next year will add another 16 yo driver). My understanding is that the rule of thumb is to carry a policy roughly equal to your net worth.

Wondering if others carry similar policies?

I was also considering titling our third car in the 18 yo's name. The cost of the insurance would escalate, but it'd create separation from our family assets. Anyone else employing a similar strategy?

[amarowsky]

Thinking about the umbrella insurance policy. But this was to supplement my renters insurance on my rentals. Umbrella's seem to be a good extra layer of defense. Although.... I wonder how hard they fight to pay out policies. I don't imagine they would have to pay out on these often, so they probably defend paying out like the dickens (or at least my expectation).

That being said I would probably be targeting a lot lower than $5 million policy. From the numbers I'm more familiar with, I think its closer to $20 ish a month. I mite go as high as 2 million, but probably not higher than than until I get more units.

We already have an LLC for our 1st shield, and the renter/landlord insurance for our 2nd bastion, before it makes it to our assets.

[HundredK]

I feel kind of bitter about umbrella policies. Years ago, my husband got in a minor fender bender at the age of 18 while on his mom's policy, and once the guy found out his mom had a $1M umbrella policy, yup, he sued for $1M. It was years in court, and trips back and forth from CA to NY.. went all the way to jury trial and the guy of course lost. But it was a hugely stressful thing, and if he'd just had normal car insurance, we know it wouldn't have been a $1M lawsuit. I will say, Allstate did a wonderful job handling the whole thing and paid for all our travel and everything. But it was a huge hassle.

[amarowsky]

Insurance companies are almost as awful and a massive waste of efficiency as (*most*) Lawyers.... They create nothing in this world, their primary function is to extract wealthy while defending clients against their own.

Like paying a gang protection against another gang..... If it weren't for lawyers, we would not need lawyers (or even insurance possibly, for that matter....)

[ua_guy]

My (now) husband and I were dating in our early 20's, and we're both into fast cars and motorcycles. This is when I was turned on to umbrella coverage. There's no way two young guys with more horsepower than brains could ever end up in trouble, right? Actually, we never did get in any trouble, thank goodness, but there were a few times when things could have ended very, very poorly. Oh, to be young and fearless again.

We still carry umbrella coverage but more in the theme of protecting our assets versus covering our asses. Same theme, different variation. We don't drive fast like we used to, that stopped a long time ago. But now we are older and better insured (movie reference).

[LivingAlmostLarge]

I still have umbrella but it costs us $237/year. I always had it owning condos. Not sure why we have it now. But I guess we figure for $237/year it is worth the extra coverage.