Do I need an umbrella policy?

[nonsenseabound]

$11 per month for $1m

[Pom]

We opted for one after we built a pool in our backyard. $1 million coverage, $140 per year.

-I personally, have been sued more than once. My husband works in a relatively dangerous occupation and has done training for his company. I would not be surprised if he got named in a law suit at some point.

www.dailyfinance.com/2013/07/05/umbrella-insurance-policies-extra-protection/

www.mymoneyblog.com/reasons-we-have-an-umbrella-liability-insurance-policy.html

[Susie]

The major cost of getting an umbrella policy isn't usually the umbrella policy itself - that part is pretty reasonable. What's more expensive is raising the limits (mostly liability) on your auto and homeowners' to the threshold limits for the carrier to underwrite an umbrella. $100k is almost assuredly too low to get an umbrella without raising your coverage limits on your auto policy, which you'll have to spend a little to do.  Whether you have full coverage on your cars is pretty irrelevant, because the value of those cars is known and quantifiable risk and they are already insured.  An umbrella is useful for the kinds of unlikely but truly financially catastrophic events that go above and beyond.  

We have a $1m umbrella policy. Our biggest reason for having it is that it will provide up to an additional $1m to back up our un- or under-insured motorist coverage, which we already max out on our auto policy. That is what would cover me if I am hit by an un- or under-insured motorist on my bike, where serious injuries are a significant risk, and who knows what the $ ceiling on that could be.  As a long course triathlete logging thousands of miles a year on my bike, I need that coverage.

ETA:  I just checked, our umbrella runs us $201/year.  Our auto limits are:

Bodily injury:  $1m/person, $1m per accident
Property damange:  $1m/accident
Supp Spousal liability:  $1m/person, $1m per accident
Supp Uninsured/underinsured motorist:  $1m/person, $1m per accident
PIP:  $50k/person
Additional PIP:  $100k/person
Optional basic economic loss:  $25k/person
Aggregate no fault benefits:  $175k

There are other coverages as well, but you get the idea.  High limits.  I don't know that we could've gone much lower and still gotten an umbrella (if we could've, we probably would've).

[bostonmichelle]

We have one, we have a pool and while I hope we don't have to ever use the insurance policy it was worth the piece of mind for us. It is $155 for $1million. We had to raise some of our auto limits, but it raised our insurance maybe another $100 for the year, it wasn't much, but I think ours were higher than yours to begin with.

[Deleted]

I just got back from lunch with my agent to discuss this and our auto limits. A $1mm umbrella is $168 a year. We do have to adjust our auto limits but that only adds $100 a year, so an extra $268 a year gives us the extra auto coverage and the umbrella. We are going to do it because we're getting ready to close on our new house, keeping our current house and would have enough that someone could try to get money from us and probably succeed if they had cause.

[Poppy]

To increase our auto liability limits to $250,000/$500,000 (from $100k/$300k which were our state minimums), was $200/year. We were required to do that in order to purchase umbrella coverage. Umbrella was an additional $130 per year for $1mil coverage.

[CloudBee]

We have $2M and I think it costs about $300/yr.

[LoveTrains]

My $1 M umbrella policy is $136/year. I did have to raise liability limits on my underlying auto policy up to $250K, though.

[raangoli]

Stupid question - is your umbrella policy with the same provider as your car insurance/homeowners? I looked and our provider says it's between 200 - 250 for a $1M policy. That seems high compared to the rest of the posters.

[LoveTrains]

Aug 20, 2014 15:32:15 GMT -5 raangoli said:

Stupid question - is your umbrella policy with the same provider as your car insurance/homeowners? I looked and our provider says it's between 200 - 250 for a $1M policy. That seems high compared to the rest of the posters.

Yes, I have my umbrella, home & auto all with the same company. 

[Susie]

Aug 20, 2014 15:32:15 GMT -5 raangoli said:

Stupid question - is your umbrella policy with the same provider as your car insurance/homeowners? I looked and our provider says it's between 200 - 250 for a $1M policy. That seems high compared to the rest of the posters.

Yes.  I have not seen a carrier willing to do an umbrella over another company's auto/home policy.  Kinda makes sense, because the umbrella is basically the backup to those coverages.

It might be worth talking to an independent agent or getting different quotes for a multi-line auto/homeowners/umbrella policy.  What matters is who has the lowest premium for the combination; you may find that the carrier that has the best multi-line policy for you isn't the cheapest for auto specifically but oh well.

[redraider523]

Aug 20, 2014 14:35:15 GMT -5 mofongo said:

We have one, I don't know why mine seems to be so much more than others, but it's close to $700 for 1M. We also had to up out car insurance limits.

What state are you in? Case laws and prior pay outs (overall insurance pool not just you) play a part in rate.

[redraider523]

Aug 20, 2014 17:26:40 GMT -5 mofongo said:

Aug 20, 2014 17:08:53 GMT -5 redraider523 said:

What state are you in? Case laws and prior pay outs (overall insurance pool not just you) play a part in rate.

Nola.

That could be part of ithe price difference. We have had several claims get drawn out for years there. Not fatal accidents and not severe injuries cases either. You could always get quotes to see.

[Deleted]

We pay $390/year for $2M. This is over 1 home, 3 cars, and DH & I are the only drivers. We have $500K liability on our home and auto policies. All are with the same insurance company.

I absolutely recommend this coverage. It not only protects your assets but your future earnings which can be garnished in the event of a judgement against you!

[tripleshot]

We have $1 million for $184/year with State Farm.

[audry80]

We have one. We pay $204 a year for 1 mil.

[jennysmitten]

Our true cost to carry an umbrealla is $221/ yr. That is with high liability limits, cost of umbrella and home discount.

I think it is so smart to carry one. I am in the insurance business, and I have seen what can happen without one.

[boston340]

$1M policy for $150/yr

[Deleted]

While I've been researching this the last few days I found out a woman at work actually had to use hers two months ago. A jury awarded over $1mm in damages to the guy her teenage daughter hit in a car accident who sued them because of his back pain.

That sealed the deal for me and my kids are still in daycare. I never thought about what would happen in this scenario if I had an accident and got sued.

Sent from my SCH-I535 using proboards

[minzy]

Thanks so much for posting about this, superduper.  I've learned something.  It seems like umbrella policies are hardly ever mentioned on this board, but obviously they can be a very important piece of financial planning.  I've been meaning to look into them a little more, especially as my insurance industry sister has been on my ass about it lately.   

So far we've not purchased one (we are not homeowners or pet owners, have clean driving records, etc.).  I have at least a tiny bit of faith that a Motion to Dismiss would work on a truly BS claim (though of course there would probably be legal fees to get there, and of course, there's the chance a claim against us wouldn't be BS).  But, as you acquire more to potentially lose, it seems like getting coverage is a no-brainer.  Thanks for making me think about this more.