When both of our new drivers had car accidents within 4 months of each other - we lost our umbrella policy. We had it since we purchased our first home and increases in our finances - so 25+ years.
It was so hard to find any company that would write us a new policy and finally we had to cut the coverage in half and pay 2x+ as much for the premium.
We were advised having an umbrella policy was an important financial safe guard and finally were able to get back to our full amount 4 years post kids car accidents.
I will add - it opened up a serious financial talk with our kids and we spent time explaining why losing full coverage of our assets could be life and life style altering for all of us.
Were they teen drivers at the time? Just curious, since they dropped you after 2 accidents. We have a large umbrella policy as well to protect our assets. It would be a scary thought not to have it.
Looking at a chart I found online about IRA/Roth protection from lawsuits, it looks like most states protect both those accounts, and federal restrictions protect your 401Ks. However, it says these states only partly protect your IRA (CA, ME, NE and WY), and these states donât protect your Roth (CA, GA, ME, MS, NE, WV, WY-partly). Donât anyone take my word for this, I just read it on a law site.
If I was a resident of one of those states that donât protect you, Iâd think about whether I want to convert my 401K into an IRA, or convert funds into Roths, without plenty of umbrella coverage.
Interesting. So out of curiosity, I called our umbrella insurer, and asked them how much it would cost to increase the policy. It looks like they charge an additional $307 for every million you increase it to (with 5 million costing $1536). Youâd think it wouldnât be such a large increase for every million, because Iâm guessing that people rarely collect.
The lady was very vague about how much she thought we needed, said every state is different, and people often like to insure their net worth. When questioned about the fact that federal laws prohibit people from taking your 401K or primary home, so for many people thatâs the bulk of their net worth, she was vague once again.
We have a $2 million umbrella policy. Itâs not that expensive, and it gives us peace of mind. H and his mom co-own the family cottage, and we are able to include it under our umbrella policy.
@dramakid2
Both our kids were new drivers - both accidents happened with the 1st year of them having their licenses and were their fault - so 2 accidents within 1 year time period. Poor car - just repaired and had it back 3 weeks and then totaled due to slow speed rear ending and airbags going off. The insurance adjuster happened to be driving by the 2nd accident and told us he thought - âpoor parents - not again!â
@tsbna44
I didnât view it as unfair at all - we were now a risk with 2 accidents. Our car insurance company did not drop us and raised the policy $ (we made the kids pay the difference and the deductible for their accidents- we are mean), but car insurance didnât raise it as much as we were expecting.
We view the Umbrella policy as optional and the insurance company could decide that we were not worth it. They were helpful providing us a name of a company that take on higher risk people at a significant cost increase. It was a good life lesson all around and as mentioned up thread allowed us to have a very serious talk with our kids about finances and protecting your assets.
Our financial planner (he does not sell insurance/services) recommended the amount to us and we never researched any further - just trust he was looking out for us and the funds he manages
I believe we pay about $700 or so for the umbrella coverage we have. The agent recommended it for peace of mind. As an attorney, Iâve known the attorneys hired under umbrella policies and they tend to be top notch.
At the urging of our financial advisor many years ago, we have an umbrella policy for $2 million. And itâs already paying off.
Last summer, D20 was in an accident with a pedestrian. She had the green light and he had a clear âno walkâ signal, but he âthought he could make itâ and darted across the street in front of her car. (Those were his words to the police officer that arrived on the scene.) After interviewing the pedestrian and my D, police officer determined she was not at fault. It even says that in his police report. Pedestrian had some injuries and went to the hospital. We thought that was it. Yet, 3 months later and some hospital bills for the pedestrian, my D is served with papers. He is suing to cover his medical bills. Seems he is 24 and has no-limited medical insurance. Our insurance agent told us that in Massachusetts pedestrians often sue for damages even if theyâre at fault because the state tends to be generous with pedestrian rights.
Well, we have not really had to do anything. Insurance agency has the lawyer taking care of everything, and we were told they will decide if they think itâs worth it to settle (which happens 90% of the time) or go to jury. Either way, our auto policy and the umbrella will cover us and the lawyer is paid.
I would be a nervous wreck without that umbrella policy. Itâs worth every dime.
My father got into a car accident and it wasnât his fault, but the other driver claimed she was disabled and was suing my father for a lot of money. The amount was below his umbrella coverage, so the insurance company took care of the law suit. They found evidences that the other driver wasnât really disabled and was at fault. The case was dismissed.
If my father umbrella insurance was lower, the insurance company wou,d have just paid and walked away.
I take out enough liability insurance to make it worth while for my insurance company to represent me, not just my net worth. Umbrella insurance is inexpensive relatively.
Definitely something to be thankful for! My teen was rear ended and is just coming out of a long lasting concussion. It took nearly 2 months for her to finally show significant recovery. Itâs been an incredibly scary experience. We will absolutely be hiring a lawyer. We were told to wait until she recovered.
On our end, we have had an umbrella policy for a long time.
It makes me wonder if itâs better to raise your homeowners and auto insurance policies to the max before raising your umbrella policy limits. Though I suspect itâs cheaper to raise the umbrella policy.
Do your high earning kids who donât drive and rent an apartment have an umbrella insurance or any insurance for this matter? Rental insurance normally doesnât cover much.
Normally, umbrella policies are much cheaper than raising other limitsâ the umbrella required you to have stated limits on all your potential liabilities.
Yes. You can get sued for various accidents, itâs not just limited to auto. Someone could fall in your home and sue you for it. You could accidentally bump into someone and the person gets hurt.
People usually sues whoever has the deep pocket.
I think my auto policy is required to be 300K/300K liability limits, but I think you can go up to 500K. I remember that the umbrella required the 300K.
Iâll take it over what could have been horrible for us and potentially others.