So I know Jacob advocates self-insuring for things like property and health insurance. However, what about liability insurance? For those who have significant assets (I consider any amount that enables ERE to be significant) it seems like you really should have some kind of umbrella policy.
I have a 7-year old car, and my primary expense for that is a million dollar liability policy. This far outstrips my assets, but I don't want to be stuck losing most of my paycheck for years to come, either. I'm a lawyer, so I know how litigious Americans can be. My father is a doctor, so I know how much health care in in the U.S. costs.
Am I over-insuring? Assume I'm keeping the car for now.
Auto Liability Insurance
You can't really self insure for risks that would wipe you out. I.e. stuff where you couldn't afford to pay for the loss yourself. What this means is that most people should get catastrophic coverage and skip the small stuff.
What I've heard recommended for liability/umbrella insurance is to have your net worth + 1Mill in coverage. It's not very expensive and I consider it well worth it.
What I've heard recommended for liability/umbrella insurance is to have your net worth + 1Mill in coverage. It's not very expensive and I consider it well worth it.
@dragoncar
I carry $100K/300K liability and uninsured motorist for just the reasons you outline. On a 1995 Chevy C1500 P/U it works out to about $50 a month. The 401(k) is judgment proof, so this protects my taxable accounts. But just barely.
Aren't you just a little worried that by "overinsuring" you are more likely to hamper the settlement negotiations in the event you are responsible for another's damages? If I was a plaintiff p.i. attorney, I'd want as close to your policy limit as I could get.
I carry $100K/300K liability and uninsured motorist for just the reasons you outline. On a 1995 Chevy C1500 P/U it works out to about $50 a month. The 401(k) is judgment proof, so this protects my taxable accounts. But just barely.
Aren't you just a little worried that by "overinsuring" you are more likely to hamper the settlement negotiations in the event you are responsible for another's damages? If I was a plaintiff p.i. attorney, I'd want as close to your policy limit as I could get.