I've seen umbrella insurance mentioned several times on the forums, but without any recommendations for specific companies or what to look for.
My net worth is enough that umbrella insurance probably makes sense for my peace of mind. However, I don't hit a lot of the criteria that would lead someone to buy it (no dog, no renters, no property, no car, little use of social media). On the other hand, I do rent cars, and have money I don't want to lose through some other exceptional circumstances...
I only have health/dental/vision insurance currently, provided through my job (no property, renter's, or car insurance). So I'm starting from a blank slate.
Any recommendations?
Umbrella insurance
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ThisDinosaur
- Posts: 997
- Joined: Fri Jul 17, 2015 9:31 am
Re: Umbrella insurance
First, I don't yet have umbrella insurance. I intermittently shop around for it, and decide to hold off.
Some advice I got (possibly on this forum?) was to compare three separate companies at most. Beyond that you're less likely to find any significant price/coverage differences worth the pain-in-the-ass factor. And it is a pain.
I will have to increase my car and homeowners insurance premiums/coverages in order to qualify for an umbrella policy. Additionally, you can often get a discount by having two or more policies with a single company and bundling. So, I call around and get quotes for each component individually, and if bundled. But the exact amount and circumstances covered varies with each company's quote.
Going through all that effort to get 3-6 sets of prices for non-identical insurance products that are more expensive than I'd like to pay makes me throw up my hands and procrastinate on it for another 6 months.
Some advice I got (possibly on this forum?) was to compare three separate companies at most. Beyond that you're less likely to find any significant price/coverage differences worth the pain-in-the-ass factor. And it is a pain.
I will have to increase my car and homeowners insurance premiums/coverages in order to qualify for an umbrella policy. Additionally, you can often get a discount by having two or more policies with a single company and bundling. So, I call around and get quotes for each component individually, and if bundled. But the exact amount and circumstances covered varies with each company's quote.
Going through all that effort to get 3-6 sets of prices for non-identical insurance products that are more expensive than I'd like to pay makes me throw up my hands and procrastinate on it for another 6 months.
Re: Umbrella insurance
Mine is through a work arrangement/offering, so it would not work for you.
I would check first with your current auto and home insurance, as often umbrella carriers want to to carry and underlying policy with them.
I would check first with your current auto and home insurance, as often umbrella carriers want to to carry and underlying policy with them.
Re: Umbrella insurance
I simply called up my current insurance provider (USAA) and asked for a quote. They looked at my existing home and auto policies and explained the minimum required coverage before the umbrella policy picks up the slack. I also took the opportunity to reduce my costs by changing my deductibles. I remember they asked a few random questions that affect the umbrella cost (do you own a dog? What breed?) but it was pretty painless. The final umbrella policy was pretty cheap for a lot of coverage, and the process only took a few minutes.
If you're starting from a blank slate it's probably even easier. I would just pick a few companies and call them up for a quote.
If you're starting from a blank slate it's probably even easier. I would just pick a few companies and call them up for a quote.
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jennypenny
- Posts: 6856
- Joined: Sun Jul 03, 2011 2:20 pm
Re: Umbrella insurance
I think most typical umbrella policies are only meant to cover anything above and beyond regular insurance. That's why they are so cheap and have coverage requirements. If M741 doesn't have any insurance currently, he won't be eligible for a normal policy. I'd recommend getting a renters policy and then tacking on an umbrella policy but since you're leaving soon, that won't work.
You could shop around for a stand-alone personal liability plan. I'm guessing it will be significantly more costly than a normal umbrella policy. Maybe it's possible for you to get travel insurance and then add umbrella coverage to that? I know you can get multi-trip travel policies that cover a set amount of time instead of a specific itinerary. Combining the two might be cheaper and provide more coverage than a stand-alone PL policy.
EdithKeeler might have a better suggestion.
You could shop around for a stand-alone personal liability plan. I'm guessing it will be significantly more costly than a normal umbrella policy. Maybe it's possible for you to get travel insurance and then add umbrella coverage to that? I know you can get multi-trip travel policies that cover a set amount of time instead of a specific itinerary. Combining the two might be cheaper and provide more coverage than a stand-alone PL policy.
EdithKeeler might have a better suggestion.
Re: Umbrella insurance
It's a good thing to think about.
You should be pretty low-risk, since you don't own a lot of things that are likely to injure people. I assume your biggest concern is against some random personal lawsuit, which is a risk because, hey, this is America.
FWIW, assets in retirement accounts are protected from creditors (NYT). So depending on how you have your stash divided, you might already be more covered than your realize.
You should be pretty low-risk, since you don't own a lot of things that are likely to injure people. I assume your biggest concern is against some random personal lawsuit, which is a risk because, hey, this is America.
FWIW, assets in retirement accounts are protected from creditors (NYT). So depending on how you have your stash divided, you might already be more covered than your realize.
Re: Umbrella insurance
Thanks everyone for the suggestions. I'm traveling this upcoming week but will call and ask around the following week and report back here!
@jennypenny - Tacking the plan on to travel insurance is a good idea, I'll see if that's an option somewhere. Or renter's insurance when I return from my trip.
@Chris - Most of my assets are not in retirement accounts, but that's good to know when I'm trying to figure out how much to protect. Yes, my only concern here is a lawsuit.
@jennypenny - Tacking the plan on to travel insurance is a good idea, I'll see if that's an option somewhere. Or renter's insurance when I return from my trip.
@Chris - Most of my assets are not in retirement accounts, but that's good to know when I'm trying to figure out how much to protect. Yes, my only concern here is a lawsuit.
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Generation-X
- Posts: 50
- Joined: Mon May 06, 2013 4:43 am
Re: Umbrella insurance
***Here's some research online that I've found when selecting umbrella insurance. These are some detailed free articles from the author who wrote insurance for dummies book:
https://www.irmi.com/articles/expert-co ... urance-101
https://www.irmi.com/articles/expert-co ... case-study
https://www.irmi.com/articles/expert-co ... a-policies
https://www.irmi.com/articles/expert-co ... a-policies
https://www.irmi.com/articles/expert-co ... -checklist
***Some Examples of umbrella check list:
https://www.irmi.com/docs/default-sourc ... f?sfvrsn=4
https://www.irmi.com/docs/default-sourc ... f?sfvrsn=4
https://www.irmi.com/docs/default-sourc ... f?sfvrsn=8
***Excerpt from above by the same author:
Comparing Umbrella Policies
To compare umbrella policies properly, create a framework by taking the following steps.
1) Keep handy the most recent edition of the umbrella policy for each insurance company you represent or have access to (e.g., via surplus-lines brokers), including all mandatory endorsements for each state in which you operate.
2) Research the differences among the policies and their endorsements. I find using a spreadsheet works best. On the left side, I list all the possible coverages an umbrella can offer that are potentially not covered by primary insurance. Then I list the company names across the top. I read each company's policy and endorsements and fill in a "yes" or "no" under that company's name across from the potential coverage. I add footnotes for any exceptions needing clarification.
I suggest that you send the spreadsheets to the various companies' claims managers for confirmation that your interpretation of the coverage is correct. Go to the claims manager who interprets policy provisions at claim time rather than the underwriting manager.
3) Learn how to read and identify liability exposures in personal contracts. I always read contracts for my clients to help them identify risks to which they're unknowingly agreeing and to make sure their coverage will respond. When possible, I recommend that they fax me the contract before they sign it so that potentially adverse provisions can be negotiated or softened—and sometimes even eliminated. For future reference, as well as for errors and omissions protection, I scan copies of these contracts into the client's automated file.
4) Create a questionnaire from your spreadsheet that will help you determine which of the gap coverages available under umbrella policies your client needs.
Choosing the right umbrella: Use your questionnaire to determine where liability coverage gaps exist in a client's underlying insurance policies. Use your spreadsheet to select the umbrella policy or policies that best plug the gaps you've identified, then implement that umbrella for your client.
Sometimes underwriters require the underlying coverage to be placed with them as a condition of writing the umbrella. Covering the uninsured liability exposures is critical, but getting the right umbrella policy often means rewriting all the underlying insurance—usually a huge hassle for you and your client. That's why for new clients—especially affluent ones—it's important to first determine which umbrella policy affords the best gap protection before shopping for the underlying insurance, so you can then place the underlying insurance, if necessary, with the umbrella company. Catastrophic gap coverage of $1 million or more is usually much more important for those who serve on boards, rent boats, have an in-ground heating oil storage tank, etc., than any difference in premiums on alternative underlying insurance policies.
Don't judge an umbrella by its cover: Over the years, I've evaluated scores of umbrella policies. I've discovered that the size of the insurance company or its advertising budget has little to do with the scope and quality of its umbrellas. The most comprehensive umbrella policies I've seen include those of several large companies, but they also can come from smaller regional insurers that file their own forms. At one time, I even found a surplus lines umbrella policy that was broader than almost any primary market policy I'd ever seen, although the insurer eventually withdrew it from the market.
Three of the worst umbrella policies I've seen have come from well-known national insurers, often targeting more affluent personal lines clients with comprehensive package policies. Two of these umbrellas were straight excess policies offering no gap coverage at all. The other "umbrella" policy was even more restrictive than the company's primary policies. It wasn't even a straight excess!
Watch out for unannounced reductions in coverage on policy renewals: Don't assume that because an insurance company has always had a strong umbrella policy that it always will. For example, I know of a regional insurance company that for years had one of the best umbrellas I'd ever seen. But, without giving notice to agents or insureds, it began using the more restrictive AAIS umbrella form on policy renewals and added about a dozen more exclusions. Most states require that insurance companies notify customers if they renew a policy with more restrictive coverage than the original. That requirement doesn't seem to apply to personal umbrella policies, unfortunately.
You can reduce the chance of this kind of surprise by noting on your comparison form the edition date of all policies you're comparing. Then, for a given policy, compare its edition date on your form to the edition date of its renewal to determine if a new assessment is necessary.
Conclusion
Personal risk management requires a great deal of expertise in coverages and contracts, a commitment to building a risk management framework, and a great deal of additional time for each client. Nowhere is this truer than with selecting the right umbrella policy. Yet, the risk management approach makes such a huge difference in a personal lines client's welfare. It's extremely professionally rewarding, and I wouldn't practice insurance any other way.
*** In addition, there could be information out there about state's bankruptcy exemption laws/rules as to what's exempt from creditors in bankruptcy and how each state determines the exemption and by what amount. It's probably important to know the rules of the game, before you play the game IMHO. It maybe that being judgement proof is important to some, in addition to having insurance. Also, knowing how each state protects IRA assets and by how much may be very important for some people considering ERE. Here's an example from State of California:
http://www.courts.ca.gov/documents/ej156.pdf
http://www.nolo.com/legal-encyclopedia/ ... i-use.html
http://www.thetaxadviser.com/content/da ... achart.pdf
I'm not an expert by any means so I have no way of knowing if any of this information is correct. Use at your own peril. Good luck!
https://www.irmi.com/articles/expert-co ... urance-101
https://www.irmi.com/articles/expert-co ... case-study
https://www.irmi.com/articles/expert-co ... a-policies
https://www.irmi.com/articles/expert-co ... a-policies
https://www.irmi.com/articles/expert-co ... -checklist
***Some Examples of umbrella check list:
https://www.irmi.com/docs/default-sourc ... f?sfvrsn=4
https://www.irmi.com/docs/default-sourc ... f?sfvrsn=4
https://www.irmi.com/docs/default-sourc ... f?sfvrsn=8
***Excerpt from above by the same author:
Comparing Umbrella Policies
To compare umbrella policies properly, create a framework by taking the following steps.
1) Keep handy the most recent edition of the umbrella policy for each insurance company you represent or have access to (e.g., via surplus-lines brokers), including all mandatory endorsements for each state in which you operate.
2) Research the differences among the policies and their endorsements. I find using a spreadsheet works best. On the left side, I list all the possible coverages an umbrella can offer that are potentially not covered by primary insurance. Then I list the company names across the top. I read each company's policy and endorsements and fill in a "yes" or "no" under that company's name across from the potential coverage. I add footnotes for any exceptions needing clarification.
I suggest that you send the spreadsheets to the various companies' claims managers for confirmation that your interpretation of the coverage is correct. Go to the claims manager who interprets policy provisions at claim time rather than the underwriting manager.
3) Learn how to read and identify liability exposures in personal contracts. I always read contracts for my clients to help them identify risks to which they're unknowingly agreeing and to make sure their coverage will respond. When possible, I recommend that they fax me the contract before they sign it so that potentially adverse provisions can be negotiated or softened—and sometimes even eliminated. For future reference, as well as for errors and omissions protection, I scan copies of these contracts into the client's automated file.
4) Create a questionnaire from your spreadsheet that will help you determine which of the gap coverages available under umbrella policies your client needs.
Choosing the right umbrella: Use your questionnaire to determine where liability coverage gaps exist in a client's underlying insurance policies. Use your spreadsheet to select the umbrella policy or policies that best plug the gaps you've identified, then implement that umbrella for your client.
Sometimes underwriters require the underlying coverage to be placed with them as a condition of writing the umbrella. Covering the uninsured liability exposures is critical, but getting the right umbrella policy often means rewriting all the underlying insurance—usually a huge hassle for you and your client. That's why for new clients—especially affluent ones—it's important to first determine which umbrella policy affords the best gap protection before shopping for the underlying insurance, so you can then place the underlying insurance, if necessary, with the umbrella company. Catastrophic gap coverage of $1 million or more is usually much more important for those who serve on boards, rent boats, have an in-ground heating oil storage tank, etc., than any difference in premiums on alternative underlying insurance policies.
Don't judge an umbrella by its cover: Over the years, I've evaluated scores of umbrella policies. I've discovered that the size of the insurance company or its advertising budget has little to do with the scope and quality of its umbrellas. The most comprehensive umbrella policies I've seen include those of several large companies, but they also can come from smaller regional insurers that file their own forms. At one time, I even found a surplus lines umbrella policy that was broader than almost any primary market policy I'd ever seen, although the insurer eventually withdrew it from the market.
Three of the worst umbrella policies I've seen have come from well-known national insurers, often targeting more affluent personal lines clients with comprehensive package policies. Two of these umbrellas were straight excess policies offering no gap coverage at all. The other "umbrella" policy was even more restrictive than the company's primary policies. It wasn't even a straight excess!
Watch out for unannounced reductions in coverage on policy renewals: Don't assume that because an insurance company has always had a strong umbrella policy that it always will. For example, I know of a regional insurance company that for years had one of the best umbrellas I'd ever seen. But, without giving notice to agents or insureds, it began using the more restrictive AAIS umbrella form on policy renewals and added about a dozen more exclusions. Most states require that insurance companies notify customers if they renew a policy with more restrictive coverage than the original. That requirement doesn't seem to apply to personal umbrella policies, unfortunately.
You can reduce the chance of this kind of surprise by noting on your comparison form the edition date of all policies you're comparing. Then, for a given policy, compare its edition date on your form to the edition date of its renewal to determine if a new assessment is necessary.
Conclusion
Personal risk management requires a great deal of expertise in coverages and contracts, a commitment to building a risk management framework, and a great deal of additional time for each client. Nowhere is this truer than with selecting the right umbrella policy. Yet, the risk management approach makes such a huge difference in a personal lines client's welfare. It's extremely professionally rewarding, and I wouldn't practice insurance any other way.
*** In addition, there could be information out there about state's bankruptcy exemption laws/rules as to what's exempt from creditors in bankruptcy and how each state determines the exemption and by what amount. It's probably important to know the rules of the game, before you play the game IMHO. It maybe that being judgement proof is important to some, in addition to having insurance. Also, knowing how each state protects IRA assets and by how much may be very important for some people considering ERE. Here's an example from State of California:
http://www.courts.ca.gov/documents/ej156.pdf
http://www.nolo.com/legal-encyclopedia/ ... i-use.html
http://www.thetaxadviser.com/content/da ... achart.pdf
I'm not an expert by any means so I have no way of knowing if any of this information is correct. Use at your own peril. Good luck!