We have 250/500 on our car - not sure how it imapacts.
But my agent just wrote back - $488 a year (umbrella) for $2 million. Not sure what it includes or excludes - I’ll ask - and re read the thread to see if that’s a fair price (vs. what others have shared).
I asked about inclusion/exclusion and he wrote back:
"It is a straight liability policy. It covers up to $2 million above your auto and home liability limits.
If you are in a horrific accident and get sued, you will have $2.5 million in coverage.
It is designed to cover the assets you have including investments, homes, and future earnings!
It’s a good thing to have when you have kids driving.
Hey all…this is a thread that really makes me appreciate this website! I have been thinking about an umbrella policy for years, but just never got around to looking into it too carefully. Because of this thread, I called up the agent for my home policy and I changed my auto policy to a new company with increased coverage, and added an umbrella policy.
The new auto policy and added umbrella actually ended up costing less than I was paying before with just the old auto policy (I signed up for the auto policy more than 30 years ago and in my case loyalty was definitely not a good for me from a financial standpoint) and I even got a discount on the homeowner’s policy because of the umbrella policy.
An umbrella policy will have minimums required on your auto and home policies. You can carry higher limits on them but usually it’s less expensive to increase coverage via the umbrella and then carry the required minimums on home & auto. $488 sounds like a good price.
Be sure to ask if the umbrella policy includes uninsured/underinsured coverage or if it is available as a rider. To me it is a critical part of an umbrella policy.
For those not tired reading about the topic there is a recent thread on Bogleheads that may be of interest – Umbrella Policy- 1M or 2M? - Bogleheads.org It also has more examples of the range of prices people are paying.
We have a high umbrella as my husband has a lot of exposure through his work. He said he varies it year to year depending on cost.
Have any of your younger generation considered umbrellas?
DD lives in NYC and does not own a car. She had to buy some kind of non-owner auto policy in order to get her umbrella. The auto part does help her whenever they rent a car. She did it all through USAA.
We had Umbrella policy for years. Now with youngest already over 18, I am skeptical.
Cost somehow increased dramatically and I am not sure we need it anymore.
My only concern is driving of my kids. But I do not believe if driver is over 18 and kids owns nothing that someone can go after owners of the car… Thoughts?
We JUST had this conversation with our insurance agent!
He is putting together a chart for us showing the major risk factors (someone cutting down a tree on your property, a roofer, anything vehicular, etc.) and the coverage and costs associated with these risks. I didn’t want to make the decision in a vacuum “Hey, it costs to much so let’s drop the coverage” without understanding the upsides and the downsides.
My prediction is that we’ll keep it-- we only use licensed contractors, but too many small businesses end up hiring folks using dangerous equipment with minimal safety training and no workmen’s comp insurance, so the risk of inadvertently opening yourself up to a major lawsuit is real. We’ve been putting off doing the roof (it’s several years overdue) and watching the neighbors, there are too many workers wandering around without harnesses or belts.
We are raising the deductible on homeowners (eliminated collision on the cars- they are old!) which is helping to keep our overall costs the same.
I was under the impression that the need for an umbrella policy was more connected to having total net assets that significantly exceed the maximum coverage numbers for car and home insurance policies.
A number of years ago we had so much snow that ice dams were a risk. We had workers walking around on our roof removing the snow. At least one part of the roof is quite high above the driveway. Nothing happened and they were good at their jobs, but it did look a bit like an accident waiting to happen.
As our kids are aging, we are aging also. We have very good driving records, but age related errors could occur at some point.
If your total assets significantly exceed the maximum coverage on your home and auto insurance, then you might consider raising the deductibles, as @blossom has suggested.
Yes, this is much more important to consider. You as an adult could be at fault in an accident. As the saying goes, “it’s better to be hit by a rich person than a poor person.”
I would never be without an umbrella policy if i owned a house or had investments. I think mine is a couple of hundred dollars a year at most.
I just recently contacted a local independent insurance agent looking to see if we could pay less on our auto and home policies which we’ve had with the same company for decades. The independent agent gave us a proposal significantly increasing our auto coverage limits and adding an umbrella policy. We meet with him this week where I’ll explain, if he can’t tell by meeting us, that our assets are very modest. But from his initial information about the umbrella policy I think we’ll get it for peace of mind. It was a little over $200/ year. We’ll be saving a couple hundred even with it and increased auto coverage over previous home and auto.
To the OP: if your home and car policies are with different carriers, check the other carrier to see if they offer a better rate for the umbrella coverage. My otherwise expensive homeowner insurer sells umbrella for significantly less than my auto insurer.
Having an umbrella policy might(?) deter lawsuits, since the insurance companies have a slew of lawyers to represent the case. If lawsuit did happen, you’d likely be less involved and certainly be less stressed without legal fees and fear of losing assets.
I’ve seen that mentioned but have never understood the reasoning. Insurance policies do not protect your assets, they just pay if you lose a lawsuit before the plaintiff goes after your assets. If you have a home and a non-retirement brokerage account that add up to $400K and you have $500K in liability on your car (so insurance actually exceeds net assets), if you’re at fault in a crash and lose a judgement of $1 million then they can go after your other assets after receiving the insurance payout.
Maybe I don’t understand what you’re saying, but I thought the point of having umbrella insurance is to protect what your auto or homeowners insurance doesn’t. So if those policies only protect 500K, umbrella insurance would protect if you’re sued for more. But if you don’t have more, they can’t sue you for what you don’t have. Hence the point about having enough umbrella insurance to cover the “more”.