OT: Personal Liability Umbrella Policy

[Mr_Twister]

I am about to do my annual renewal of a $2M personal liability umbrella policy.
Every year I ask myself why am I doing this.
I know no one who has ever benefitted directly from this coverage.
Perhaps that's a good thing.
Has anyone benefitted from their policy, other than peace of mind?

 

[Bagarocks]

Its like the Fire station down the Street. You are happy the first responders are there, but ya never want to need them to come to your house.

 

[JayDogSmooth]

We have a 1 million dollar umbrella, I wanted 2 but my insurance guy said the more you have, the more they’ll sue you for if it ever came to that

For us, it’s piece of mind and not overly expensive

 

[Mr_Twister]

I have none of these, which increase the likelihood of being sued.

• Being a volunteer board member.
• Being a youth sports coach, official or referee.
• Employing people for your household, such as a gardener or house cleaner.
• Having a prominent public or online profile.
• Having a swimming pool or trampoline on your property.
• Having an elderly or teen driver in your household.
• Having kids live at home.
• Hosting large gatherings or parties at your home.
• Owning a dog.
• Owning horses or other large animals.
• Own recreational vehicles like ATVs, boats, golf carts, motorcycles or jet skis.
• Owning rental properties.

 

[ClassOf02]

It’s an individual decision. One of those things where you can talk yourself into it being unnecessary, but in the event you ever need it, you’re sure glad you have it.

An insurance agent would likely advise you to consider your liability exposure, such as how many cars you have, how many drivers in your household (including youthful drivers), whether you have dogs or not, having a pool, often having events/parties at your house, etc.

End of the day, no one can make the decision except you.

 

[Knight Shift]

I have none of these, which increase the likelihood of being sued.

• Being a volunteer board member.
• Being a youth sports coach, official or referee.
• Employing people for your household, such as a gardener or house cleaner.
• Having a prominent public or online profile.
• Having a swimming pool or trampoline on your property.
• Having an elderly or teen driver in your household.
• Having kids live at home.
• Hosting large gatherings or parties at your home.
• Owning a dog.
• Owning horses or other large animals.
• Own recreational vehicles like ATVs, boats, golf carts, motorcycles or jet skis.
• Owning rental properties.

Look at it as a cost-benefit analysis.

A couple of items you may not have considered:

1. Do you have a sidewalk in front of your home?
2. Do you get many items delivered via courier or Amazon?
3. Do you mow your own lawn or does a service handle this.
4. You never have work done on your property or in your home-painter, plumber, etc?

Not trying to encourage you to get liability coverage, but just covering bases.

Interesting conversation came up in the context of hiring a home health aide for an elderly relative, and the person advised that if you contract privately with an individual, to be sure to check homeowners insurance in case they get injured while assisting the relative. You indicated this is not an issue for you, but another example of an incidental person in someone's home that could be a source of liability.

 

[Mr_Twister]

I was hoping that someone here actually cited a personal case where they and their family or someone they knew benefited directly from a personal liability umbrella policy. A family member who worked for a living once told me there is a reason why insurance agents play golf one morning a work-week and the rest of us go to work.

 

[WasatRutgers]

It depends on how much in assets you have beyond the auto and home liability limits that the suing party could go after.

 

[kupuna133]

Look at it as a cost-benefit analysis.

A couple of items you may not have considered:

1. Do you have a sidewalk in front of your home?
2. Do you get many items delivered via courier or Amazon?
3. Do you mow your own lawn or does a service handle this.
4. You never have work done on your property or in your home-painter, plumber, etc?

Not trying to encourage you to get liability coverage, but just covering bases.

Interesting conversation came up in the context of hiring a home health aide for an elderly relative, and the person advised that if you contract privately with an individual, to be sure to check homeowners insurance in case they get injured while assisting the relative. You indicated this is not an issue for you, but another example of an incidental person in someone's home that could be a source of liability.

Know a family from Spring Lake that had to sell their house to cover liability from a privately contracted home health aide slip/fall.

Worst part is this women was basically a member of their family had her medical bills paid for and lived with them for many years. Slip fell and “someone” convinced her to sue the family.

Women was paid under the table was in the country illegally and had outstanding issues from her former Soviet block country. So she never really benefited from the settlement and was deported. Worked out for everyone.

Don’t hire under the table and make sure if you do hire independently you have an umbrella policy.

 

[Mr_Twister]

Know a family from Spring Lake that had to sell their house to cover liability from a privately contracted home health aide slip/fall.

Worst part is this women was basically a member of their family had her medical bills paid for and lived with them for many years. Slip fell and “someone” convinced her to sue the family.

Women was paid under the table was in the country illegally and had outstanding issues from her former Soviet block country. So she never really benefited from the settlement and was deported. Worked out for everyone.

Don’t hire under the table and make sure if you do hire independently you have an umbrella policy.

So this family did not benefit from having a personal liability umbrella policy? It was out-of-pocket.

 

[e5fdny]

It’s like the Fire station down the Street. You are happy the first responders are there, but ya never want to need them to come to your house.

You’d surprised (or maybe not - lol) to hear what we have been “needed” for over the course of close to 30yrs. 🙂

🎶“Like a good neighbor, FDNY is there…”🎶

 

[kupuna133]

So this family did not benefit from having a personal liability umbrella policy? It was out-of-pocket.

Don’t think they had umbrella policy or if they did wasn’t rich enough. Was advised by my insurance guy that many homeowners policies and umbrellas are voided/reduced in coverage if vendors are not licensed bonded or insured and definitely if work is performed under the table.

 

[Knight Shift]

I was hoping that someone here actually cited a personal case where they and their family or someone they knew benefited directly from a personal liability umbrella policy. A family member who worked for a living once told me there is a reason why insurance agents play golf one morning a work-week and the rest of us go to work.

There's a good answer below.
Just like the "good" fire station down the street.
Or even just like a "good" attorney.
A "good" insurance agent is worth their weight in gold. The challenge is finding a "good" one.
Case in point, our business was ready to pay out of pocket for a bogus lawsuit that we were a named defendant, along with several other businesses in our building. I consulted a colleague, who is a local insurance agent. He pointed me to an obscure clause in our business policy that covered the costs of our counsel to defend us. 2-3 years later, the case is still going, and we have not paid the defense attorneys a penny. All covered by our business policy that we never thought would have covered such an incident.

Don’t think they had umbrella policy or if they did wasn’t rich enough. Was advised by my insurance guy that many homeowners policies and umbrellas are voided/reduced in coverage if vendors are not licensed bonded or insured and definitely if work is performed under the table.

Aside from that, they could have gotten flagged by the tax authorities for not paying the proper taxes. A friend of mine often says: "The cheapest way to go is first class."

But back to @Mr_Twister , if your life is not complicated as you have indicated, an umbrella policy may be overkill for you and a waste of money.

 

[kupuna133]

There's a good answer below.
Just like the "good" fire station down the street.
Or even just like a "good" attorney.
A "good" insurance agent is worth their weight in gold. The challenge is finding a "good" one.
Case in point, our business was ready to pay out of pocket for a bogus lawsuit that we were a named defendant, along with several other businesses in our building. I consulted a colleague, who is a local insurance agent. He pointed me to an obscure clause in our business policy that covered the costs of our counsel to defend us. 2-3 years later, the case is still going, and we have not paid the defense attorneys a penny. All covered by our business policy that we never thought would have covered such an incident.


Aside from that, they could have gotten flagged by the tax authorities for not paying the proper taxes. A friend of mine often says: "The cheapest way to go is first class."

But back to @Mr_Twister , if your life is not complicated as you have indicated, an umbrella policy may be overkill for you and a waste of money.

Oh they did get hit with many employment and tax related fines. This women worked for the family for close to 15 years caring for husband then wife. Family paid out multiple millions.

 

[RU at the shore]

I can tell you from professional experience that my firm has needed to pursue personal assets against several underinsured people who did not have umbrella coverage, but has never done this in claims involving those covered by umbrella insurance.

 

[Mr_Twister]

I am renewing the policy, though a large part of my assets are retirement funds and a Florida residence which I assume are untouchable in a legal tangle.

 

[Scarlet1984]

Many, many years ago we had a babysitter (4 days a week) we paid in cash and she had a fall at our home and broke her hip (she was relatively young for that kind of injury). We filed a claim with our homeowners and they covered it (including workers comp).

We did clean up the tax situation at that time but that did not have an impact either way on the homeowners.

Homeowners insurance does cover a lot of things that happen outside the home as well.

I would talk to a good insurance agent and get some advice.

The thing someone said about only getting sued if they know you have insurance is something my corporate lawyer has said - which is advice that should go in one ear and out the other, in my opinion.

I don’t have a good example of where umbrella coverage has come in handy. But I do have high umbrella coverage. I think 1x net worth might be a good rule of thumb but I’m no expert.

 

[tom1944]

What does the policy cost?

Even if you can afford the high end of the cost that plays a part in the value of buying it.

 

[e5fdny]

I am renewing the policy, though a large part of my assets are retirement funds and a Florida residence which I assume are untouchable in a legal tangle.

Isn’t that why OJ “moved” to FL?

I recall reading something about that.

 

[SouthJerseyRU]

Being a youth sports coach, official or referee.

On this specific point, a few years ago when I started coaching my son in Little League, we had to take the 3 hour Rutgers Safety course. IANAL, but from my understanding this provides some sort of protection from being sued if something happens while volunteer coaching.

 

[Mr_Twister]

Isn’t that why OJ “moved” to FL?

I recall reading something about that.

It’s my understanding that Florida residents can’t lose their homes in a legal entanglement. I’m no lawyer. BTW my $2M personal liability umbrella policy is just under $800 a year.

 

[RUBubba]

I personally do know someone that lost over $800,000 out of their investment portfolio because they did NOT have an umbrella. He was involved in a car accident, his fault, and the other person was hurt pretty bad.

Umbrellas are pretty cheap... Maybe $250 for the average person, but obviously gets more expensive as you add more cars, houses, boats, young drivers, etc as well as higher limits.

 

[vkj91]

I have a 10 million dollar policy. Paying for that bothers me a lot less than paying for disability insurance every year. That’s the biggest scam. Lol

 

[Armor and Sword]

I have it for work as I am a supervisor, I get reimbursed for the premium. While my employer should be the one on the hook if I make decisions on its behalf, it's for whenever I become liable for those actions. Considering getting it for family.

 

[BigRnj]

I always thought that an umbrella policy show equal or exceed your net worth to “cover” whatever the suing party might go after. Anyone know if this is the case? I’m looking into getting one now … I’m also hosting a wedding in my yard this summer …

Any advice on coverage?

 

[ClassOf02]

I always thought that an umbrella policy show equal or exceed your net worth to “cover” whatever the suing party might go after. Anyone know if this is the case? I’m looking into getting one now … I’m also hosting a wedding in my yard this summer …

Any advice on coverage?

I’d agree that the limit should be adequate to cover your net worth…that’s a good measuring stick when deciding how much to buy.

Best advice: make sure your underlying coverage that the umbrella will sit above has adequate limits/coverage. Particularly with regard to your personal auto limits. Most umbrella policies have a requirement as to liability limits on the primary auto policy and if there’s a gap there, you’d be on the hook for however big that gap is.

Second nugget of best advice: get a good agent (emphasis on good). He/She will advise you on all the things you need to know.

 

[vkj91]

I always thought that an umbrella policy show equal or exceed your net worth to “cover” whatever the suing party might go after. Anyone know if this is the case? I’m looking into getting one now … I’m also hosting a wedding in my yard this summer …

Any advice on coverage?

Might want to get started on it. In our case we couldn’t use a standard carrier like State Farm because we wanted above their limits. Think it was a 2 million cap. Problem is once you get a different umbrella company we had to change almost all of our carriers. We needed to use the same company for home, auto and umbrella and it wasn’t an easy process.

 

[e5fdny]

Might want to get started on it. In our case we couldn’t use a standard carrier like State Farm because we wanted above their limits. Think it was a 2 million cap. Problem is once you get a different umbrella company we had to change almost all of our carriers. We needed to use the same company for home, auto and umbrella and it wasn’t an easy process.

Mine is not $10M so we were still able to bundle everything with our carrier.

But apparently “Jake” need some new khakis because everything went up.

 

[Leonard23]

Might want to get started on it. In our case we couldn’t use a standard carrier like State Farm because we wanted above their limits. Think it was a 2 million cap. Problem is once you get a different umbrella company we had to change almost all of our carriers. We needed to use the same company for home, auto and umbrella and it wasn’t an easy process.

USAA goes up to $5M, but you can get higher coverage through the USAA Insurance Agency, which is their commercial coverage agency. ~$400 for $1M and then +$200/each additional $1M of coverage up to $5M.

 

[mildone]

I have a 10 million dollar policy. Paying for that bothers me a lot less than paying for disability insurance every year. That’s the biggest scam. Lol

Yeah? I'm coming over later to fall on your property. 🙂

I have similar coverage, IIRC. I don't recall the details but it didn't strike me as expensive. Also have disability. Why does disability bother you or strike you as a scam? I again don't recall the exact details, but that too strikes me as pretty inexpensive.

 

[vkj91]

Yeah? I'm coming over later to fall on your property. 🙂

I have similar coverage, IIRC. I don't recall the details but it didn't strike me as expensive. Also have disability. Why does disability bother you or strike you as a scam? I again don't recall the exact details, but that too strikes me as pretty inexpensive.

Due to the fact there are a bunch of psychos on this board I don’t like put too much personal info out but due to my work disability is really expensive and rarely approved. I pay like $30,000 a year for my
Policies.

 

[mildone]

Due to the fact there are a bunch of psychos on this board I don’t like put too much personal info out but due to my work disability is really expensive and rarely approved. I pay like $30,000 a year for my
Policies.

Always wise keeping personal stuff to a minimum online.

$30K for disability is a lot. I think mine’s maybe 1/10th that, or thereabout. Come to think of it, I’m not even sure why I’m paying for it at all anymore. Not sure I need it. I need to call my agent and ask.

 

[JayDogSmooth]

My wife and I both have work disability, she drives about 15 minutes each way, so her risk is pretty minimal, but since I’m in sales, I am always driving all over and the risk is much greater. It’s more for peace of mind just in case something were to happen, still have income coming in.

 

[vkj91]

Always wise keeping personal stuff to a minimum online.

$30K for disability is a lot. I think mine’s maybe 1/10th that, or thereabout. Come to think of it, I’m not even sure why I’m paying for it at all anymore. Not sure I need it. I need to call my agent and ask.

It’s a few policies that add up to huge amounts. Something like 5 million after 90 days and then a few million a year for life.

 

[RuSnp]

We have a 1 million dollar umbrella, I wanted 2 but my insurance guy said the more you have, the more they’ll sue you for if it ever came to that

For us, it’s piece of mind and not overly expensive

The idea that not carrying insurance somehow protects you from big payouts is sort of lunacy. Reminds me of an ice skating rink that had a sign "we have no liability insurance so don't bother suing." Uh - if you're negligent you still gotta pay up guys - the insurance just defends/indemnifies.

 

[rutgersdave]

I have a 10 million dollar policy. Paying for that bothers me a lot less than paying for disability insurance every year. That’s the biggest scam. Lol

No, disability insurance is not a scam. I know several individuals that didn’t have the disability insurance from work and they were highly compensated individuals that would have received 60% of their salary till 65 if they had elected it. It is expensive insurance because the payout is so high. Most people don’t elect it since it’s so expensive, I don’t believe I took it. One had a stoke and another brain damage due to the hospital accident routine testing or mistake.

 

[mildone]

It’s a few policies that add up to huge amounts. Something like 5 million after 90 days and then a few million a year for life.

Then forget me having a fall on your property, maybe *you* should have a disabling fall on your property. 😀

 

[JayDogSmooth]

The idea that not carrying insurance somehow protects you from big payouts is sort of lunacy. Reminds me of an ice skating rink that had a sign "we have no liability insurance so don't bother suing." Uh - if you're negligent you still gotta pay up guys - the insurance just defends/indemnifies.

Yeah, that is the point, where you hope you would never have to use it but if something crazy happens, it’s there for a reason.

I kind of like it to Unemployment that we all pay into, we never wanna lose our jobs but if something came about, and there was a sudden job loss, Unemployment would certainly help bridge that gap for a small period of time