Is umbrella policy needed?

[Gracie09]

We have a million dollar policy on top of homeowners and auto. When my dd started having therapists come to the house we wanted to be protected in case they fell or otherwise hurt themselves. We kept it because it was so inexpensive

 

[tvguy]

When we sat down to do our estate planning with a CPA, a Financial Advisor and a Lawyer their lists of basic things people need were all the same.
1) A Will
2) A Living Trust
3) An umbrella insurance policy
4) Long term care insurance (the younger you are when you buy it the cheaper the premiums)

A look at life insurance needs was also on the list, but not everyone needs life insurance, so it is not on the required list.

 

[Dakota731]

Ours was $78 for one year

Can I ask what company you insure with? I wouldn't hesitate for that price but $400 on top of the $1500 I already pay is a big deal to my budget!

 

[Ranger111]

Can I ask what company you insure with? I wouldn't hesitate for that price but $400 on top of the $1500 I already pay is a big deal to my budget!

Most companies require an underlying policy from their own company before they will issue an umbrella policy -- a fancy way of saying you can't "Just buy" an umbrella policy only from an insurer. You have to have the basic insurance from that company and then that company will sell an umbrella policy. But they will not sell an umbrella policy alone.

But that is just their policy, not a rule, nor a regulation. There are companies that will sell a umbrella policy only, provided you have underlying policies that meet their criteria.

Unless you want to switch all your insurance, which there is nothing wrong with doing, I would suggest calling a couple of "independent" insurance agents in your area and tell them your situation and ASK them if a separate umbrella policy is possible in your area. You will probably get a push to move all your business, but a good agent will not be pushy and you may find a policy for much cheaper (I agree, $400 sounds way high).

Again, though, I would call two independent agents -- tell them about the $400 quote -- they don't necessarily have to be in your town, but they need to be in your state....or at least licensed in your state if you do any sort of online thing.

 

[6bowmans]

At which insurance companies are you guys finding these inexpensive policies? Allstate just quoted me $115/month for a $1M umbrella policy (2 adults and 3 teenagers).

 

[Ranger111]

At which insurance companies are you guys finding these inexpensive policies? Allstate just quoted me $115/month for a $1M umbrella policy (2 adults and 3 teenagers).

In my experience, Allstate has never been one of the more "budget" firms. I would suggest you do what I suggested a couple of posts above, and call a couple of independent agents, just to get their take on the thing. Tell them about the quote. Ask if they have any companies that will sell a standalone umbrella....or if not, what the ballpark would be on an umbrella added to a complete package....gives you a realistic idea for your area anyway.

Insurance varies by region. Just because that "lizard" company is cheap for me, it may be the most expensive by far in your area.

 

[supersnoop]

At which insurance companies are you guys finding these inexpensive policies? Allstate just quoted me $115/month for a $1M umbrella policy (2 adults and 3 teenagers).

Generally speaking, in order to add an umbrella policy, you have to increase your auto insurance to higher liability limits, $300-$500k. If those teenagers are driving, that could explain why the difference is so large.

 

[6bowmans]

Generally speaking, in order to add an umbrella policy, you have to increase your auto insurance to higher liability limits, $300-$500k. If those teenagers are driving, that could explain why the difference is so large.

The $115/month was just for the umbrella and did not include the increases to the underlying policies (another $40/month). For whatever reason, Allstate is by far the least expensive for me for home and auto. I guess I will have to shop with some independent agents for an umbrella as Ranger111 suggested.

 

[tvguy]

The $115/month was just for the umbrella and did not include the increases to the underlying policies (another $40/month). For whatever reason, Allstate is by far the least expensive for me for home and auto. I guess I will have to shop with some independent agents for an umbrella as Ranger111 suggested.

I have Allstate and my umbrella policy for $1 million is $331 a year. I have Homeowners and Auto thru them and purchasing a third policy thru them actually lowered by existing politics...by a whole $10 a year each!. I have always carried the maximum coverage on auto that they offer, so didn't have to alter anything.

 

[Anne34]

We also have Allstate with a 1M umbrella. We have 2 adults and 3 teens and pay just over $700/yr. we have 5 cars and houses with them also.

 

[kphamousbr]

I thought your 401k is safe when you get sue, nobody can touch your retirement . I may be incorrect.

 

[scrapquitler]

At which insurance companies are you guys finding these inexpensive policies? Allstate just quoted me $115/month for a $1M umbrella policy (2 adults and 3 teenagers).

Mine is Travelers. They also hold the policies for both our cars and both our houses. I get a discount on each policy for having the others with the same company.

 

[6bowmans]

We also have Allstate with a 1M umbrella. We have 2 adults and 3 teens and pay just over $700/yr. we have 5 cars and houses with them also.

Same here - do you have a pool? I'm thinking it must be the pool.

 

[Ranger111]

I thought your 401k is safe when you get sue, nobody can touch your retirement . I may be incorrect.

Read the information in the link below....in the days before the internet, NOLO was the go-to place for "do-it-yourself" legal books and a darn good one, I might add. And they still are quite, quite valuable.

I just used one of their books a couple of years ago to pursue a claim against Hartford Insurance and their books worked beautifully. The sample letters worked perfectly and actually ended up getting several thousand more $$ than I expected. The only issue is that I "agreed" to the settlement and I no longer have any recourse if my injuries act up in years to come, but that is standard for any claim and the book also explained all that to me....anyway, I digress....read the link below regarding retirement accounts.

As a take-away, a 401K is probably safe, but not necessarily....the following are probably not safe, but not necessarily, but read the link all the way through, it explains it quite well:

traditional Individual Retirement Accounts (IRAs)

Roth IRAs

Simplified Employee Pension (SEP) Plans

SIMPLE IRAs

http://www.nolo.com/legal-encyclopedia/can-judgment-creditors-go-after-my-retirement-accounts.html

 

[Anne34]

Same here - do you have a pool? I'm thinking it must be the pool.

No pool. Just live in a chicago suburb and Everything is pretty expensive here.

 

[eliza61]

At which insurance companies are you guys finding these inexpensive policies? Allstate just quoted me $115/month for a $1M umbrella policy (2 adults and 3 teenagers).

I got an umbrella policy from allstate (me and my two young adult sons) for 825 additional per year.

but I do have their auto and homeowners insurance

 

[MillauFr]

I am shocked how many people buy travel insurance but don't buy an umbrella policy. Canceling a cruise wouldn't cause most people to declare bankruptcy but getting sued for a million when some kid slips on your front steps would.

 

[tvguy]

I am shocked how many people buy travel insurance but don't buy an umbrella policy. Canceling a cruise wouldn't cause most people to declare bankruptcy but getting sued for a million when some kid slips on your front steps would.

Very true.

 

[kathy884]

I am shocked how many people buy travel insurance but don't buy an umbrella policy. Canceling a cruise wouldn't cause most people to declare bankruptcy but getting sued for a million when some kid slips on your front steps would.

I'm on the save wave length.

I'm one of those who carries an umbrella liability policy -- It's about $130 a year for one million of coverage. I carry it because we have assets. I don't buy travel insurance, as I can self insure for that. If my vacation gets canceled, it's not like I can do it another time that year -- We're tied to the school schedule, and I'll have the money in the budget to do another vacation the next year. If someone sues me, I don't have the emergency reserves for that, so that's why I carry the policy. Also our medical insurance at work covers emergency evacuation, so it's not like I need travel insurance for that either (another reason I don't get travel insurance). Most places we travel to have good hospitals, etc. too. We don't go too many places that are that remote or exotic.

My philosophy is that if you have emergency reserves you need less insurance for smaller things and can carry larger deductibles (self insure). And what insurance is really for are the rarer big things that you couldn't just pay for or would be a significant hit to you financially to pay for.

 

[AnnaS]

I also at one time had two teenage sons driving. Car insurance was crazy expensive (Allstate). I wanted more protection and inquired about the Umbrella policy. I was also told then I had to increase the insurance on the cars to the max $500,000 (4 cars). I honestly don't remember what she said about my homeowners. I priced increasing the liability to the max and then an Umbrella policy. I asked about increasing the car liability to $1M & I increased the homeowners to $500,000. It was a few dollars less this way. Does the Umbrella policy offer more/better protection? Maybe I should just look into an umbrella policy again. (Two sons married & 1 Adult dd at home driving)>