Don’t need a PUP? [personal umbrella policy]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
Grifin
Posts: 11
Joined: Wed Apr 22, 2020 9:30 pm
Location: SATX

Don’t need a PUP? [personal umbrella policy]

Post by Grifin »

Hi again,

I was chatting with my personal injury lawyer neighbor about PUPs the other day. He surprised me in stating that PUPs are a waste of money in that a plaintiff’s lawyer will just go for the policy limits and not personal assets.

So I laid out a gross scenario in which I slam into a 15 person van causing all the perish due to my negligence while only carrying the state mandated minimum coverage. He stated that the plaintiff would go for the policy limit only with a very low chance of getting anything more.

I am still in awe by that response. I currently have a $2MM PUP and feel if I were responsible with great harm, that the victim should be paid for the damages commensurate to the loss.

Are there any personal injury lawyers or insurance professionals out there that can weigh in?

Cheers
Last edited by Grifin on Tue May 18, 2021 8:51 pm, edited 1 time in total.
Vettepilot
Posts: 25
Joined: Mon Jul 31, 2017 11:24 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by Vettepilot »

PI lawyer here. Generally, we do only go after insurance. But in cases where the insurance limits are insufficient and the defendant has significant assets, I have an ethical obligation to pursue recovery for my client. Part of this decision is also based on whether the defendant carried reasonable insurance. If the D had a large taxable account or cash in the bank, but chose to carry state minimum auto limits, I'm going after his assets. If he had the same assets, but chose to carry 500k limits, he has taken reasonable steps to protect others, and that weighs in the decision I'm going to make with my client.

I personally carry a large umbrella policy. Also very high undersinsured/uninsured limits. I have seen both come in handy.
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

If you have significant assets (including future income), one would be short sighted to not have at least a $1M umbrella.
Topic Author
Grifin
Posts: 11
Joined: Wed Apr 22, 2020 9:30 pm
Location: SATX

Re: Don’t need a PUP? [personal umbrella policy]

Post by Grifin »

Vettepilot wrote: Tue May 18, 2021 8:50 pm PI lawyer here. Generally, we do only go after insurance. But in cases where the insurance limits are insufficient and the defendant has significant assets, I have an ethical obligation to pursue recovery for my client. Part of this decision is also based on whether the defendant carried reasonable insurance. If the D had a large taxable account or cash in the bank, but chose to carry state minimum auto limits, I'm going after his assets. If he had the same assets, but chose to carry 500k limits, he has taken reasonable steps to protect others, and that weighs in the decision I'm going to make with my client.

I personally carry a large umbrella policy. Also very high undersinsured/uninsured limits. I have seen both come in handy.
Thank you. Your response makes practical sense.
Lee_WSP
Posts: 4742
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Don’t need a PUP? [personal umbrella policy]

Post by Lee_WSP »

It's ultimately up to the client as to how much to settle for, but if the limits are enough to make the client whole or mostly whole, there's no point in dragging on the through trial, past judgment, any appeals, and then into collections.
User avatar
Watty
Posts: 22645
Joined: Wed Oct 10, 2007 3:55 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Watty »

Don’t need a PUP?
You are asking the wrong question.

Instead of asking about "need" it would be better to ask if the PUP is worth $300(???) a year to you and if you can afford that.
Bobby206
Posts: 549
Joined: Fri Oct 05, 2018 4:01 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Bobby206 »

Soon2BXProgrammer wrote: Tue May 18, 2021 8:53 pm If you have significant assets (including future income), one would be short sighted to not have at least a $1M umbrella.
I would say $2m or $3m at least. It's pennies for each extra million.
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

Bobby206 wrote: Tue May 18, 2021 9:33 pm
Soon2BXProgrammer wrote: Tue May 18, 2021 8:53 pm If you have significant assets (including future income), one would be short sighted to not have at least a $1M umbrella.
I would say $2m or $3m at least. It's pennies for each extra million.
I'm not saying that one shouldn't buy more then $1M, just that the first million has a ton of value/utility even if you don't already have significant assets. Definitely, if one has multiple millions of dollars outside of ERISA accounts, they should consider matching that exposed wealth to their umbrella size. (and they can obviously afford it)
User avatar
HanSolo
Posts: 380
Joined: Thu Jul 19, 2012 3:18 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by HanSolo »

I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
barberakb
Posts: 312
Joined: Fri Apr 21, 2017 11:14 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by barberakb »

They are so cheap I don't see any reason not to have one.

If you never need it great, if you need it and don't have one, good luck.
User avatar
sunny_socal
Posts: 2384
Joined: Tue Mar 24, 2015 4:22 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by sunny_socal »

barberakb wrote: Wed May 19, 2021 6:22 am They are so cheap I don't see any reason not to have one.

If you never need it great, if you need it and don't have one, good luck.
From personal experience - even if you have a tiny fender bender over the last 5 years you can't get the umbrella.
David Althaus
Posts: 320
Joined: Wed Feb 14, 2018 8:05 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by David Althaus »

There is wasting money and then there is wasting money. PUP costs me about $150 per million per year. That policy means I have the entire legal staff of my insurance company fighting to protect their policy payouts. The risk of not using is of course low but there could be a catastrophic outcome if sued. It's cheap and if there's one thing I want to overinsure it's my net worth. Call me a spendthrift.

All the best
User avatar
climber2020
Posts: 1945
Joined: Sun Mar 25, 2012 8:06 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by climber2020 »

HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
You may not even qualify for an umbrella policy.

I was not able to obtain one from my insurance company when I was a renter; it was only after buying a house that I became eligible.
SanAntionetta
Posts: 96
Joined: Fri Apr 06, 2018 1:42 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by SanAntionetta »

Insurance professional here. In 15 years I have seen catastrophic losses, all of which settled within or for the policy limits. Plaintiffs attorneys don't want to waste their time going after $ they might have a tough time collecting. I personally have a PUP because I am a responsible person, and would feel bad if someone got really hurt and I did not have enough insurance to help.

In Europe they have unlimited policy limits, however injured people are compensated much more conservatively. With the amount that we pay in the U.S. system no one would be able to afford unlimited policy limits. It is an interesting question as to whose system is better for the injured - obviously Europe is much more equitable. My colleagues in Europe think the U.S. system, where people can run around with $20K in BI limits and maim someone without any repercussions, is completely bonkers.
cshell2
Posts: 652
Joined: Thu May 09, 2019 10:29 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by cshell2 »

HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
I don't know why you would need one in this situation. A massive lawsuit would most likely be from a car accident or something happening on property you own. Like your teenage driver plows into a daycare and kills or injures 17 kids like happened in TX a few years back. Pretty sure the 500K auto liability coverage isn't going to pay for all that medical care and the lawsuits.
badger42
Posts: 556
Joined: Thu Apr 09, 2015 9:01 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by badger42 »

Umbrella also covers weird edge cases that your auto and homeowners policies don't.

For example, let's say you're out on your bicycle and are in a collision with a kid, possibly through no fault of your own. Your auto policy doesn't cover you, but Umbrella will. For an occasional rider, not necessarily much of a risk - but as somebody who commuted on a bike for many years, the accumulated liability risk means having that coverage was a good idea (though I did not end up needing it - but I did have to lay down the bike once to avoid hitting a kid)

Having a few million of umbrella also means the insurance company will take your defense very seriously (quality lawyers, etc) because more $$ are at stake.
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

cshell2 wrote: Wed May 19, 2021 8:20 am
HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
I don't know why you would need one in this situation. A massive lawsuit would most likely be from a car accident or something happening on property you own. Like your teenage driver plows into a daycare and kills or injures 17 kids like happened in TX a few years back. Pretty sure the 500K auto liability coverage isn't going to pay for all that medical care and the lawsuits.
If you drive occasionally (even rental cars), one might consider a "non-owner" car policy (it can be pretty cheap), and a rental policy, should allow one to have a umbrella.. Maybe i'm conservative, but being insured from a liability perspective makes sense at my NW level.

If you are retired, most of your money is in a pension and 401k (IRA protections are different and at the state level). then no it probably doesn't make sense.
User avatar
TomatoTomahto
Posts: 12577
Joined: Mon Apr 11, 2011 1:48 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by TomatoTomahto »

SanAntionetta wrote: Wed May 19, 2021 8:01 am I personally have a PUP because I am a responsible person, and would feel bad if someone got really hurt and I did not have enough insurance to help.
Thank you for stating this. I bring it up often in these threads, but it’s tiring. I am always surprised that it has to be stated on BH, whose membership is “ethical to the max,” and happy to remind everyone of that.

I would feel miserable if my short-sightedness and stinginess had prevented financial compensation for whatever harm I’d caused. We have as much umbrella as the company will give us.
I get the FI part but not the RE part of FIRE.
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

badger42 wrote: Wed May 19, 2021 8:34 am Umbrella also covers weird edge cases that your auto and homeowners policies don't.

For example, let's say you're out on your bicycle and are in a collision with a kid, possibly through no fault of your own. Your auto policy doesn't cover you, but Umbrella will. For an occasional rider, not necessarily much of a risk - but as somebody who commuted on a bike for many years, the accumulated liability risk means having that coverage was a good idea (though I did not end up needing it - but I did have to lay down the bike once to avoid hitting a kid)

Having a few million of umbrella also means the insurance company will take your defense very seriously (quality lawyers, etc) because more $$ are at stake.
i've thought about this case. and if it makes sense for real bikers to have a https://www.markelinsurance.com/bicycle policy.. i'm only thinking fro a liability perspective, not a covering the bike perspective.
michaeljc70
Posts: 7749
Joined: Thu Oct 15, 2015 3:53 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by michaeljc70 »

I think your neighbor is giving general advice that applies to most situations because most people have nothing in recoverable assets. Most people, if they have anything, have a residence and/or retirement accounts.

I had a friend that a few years ago was sued for more than his HO policy. A neighbor was walking on the sidewalk, approached my friend's dog (through a fence, never at risk of a bite), the dog barked and startled her and she fell and broke her arm (needing surgery). The dog was a French bulldog. He has a $300k policy and they sued for $500k (or something like that). It was a very stressful year for my friend. They eventually settled for the policy limit.
Lee_WSP
Posts: 4742
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Don’t need a PUP? [personal umbrella policy]

Post by Lee_WSP »

badger42 wrote: Wed May 19, 2021 8:34 am Umbrella also covers weird edge cases that your auto and homeowners policies don't.

For example, let's say you're out on your bicycle and are in a collision with a kid, possibly through no fault of your own. Your auto policy doesn't cover you, but Umbrella will. For an occasional rider, not necessarily much of a risk - but as somebody who commuted on a bike for many years, the accumulated liability risk means having that coverage was a good idea (though I did not end up needing it - but I did have to lay down the bike once to avoid hitting a kid)

Having a few million of umbrella also means the insurance company will take your defense very seriously (quality lawyers, etc) because more $$ are at stake.
Your homeowners or renters policy is the policy that covers personal liability arising from non-auto, non-boat incidents.
User avatar
FIREchief
Posts: 6756
Joined: Fri Aug 19, 2016 6:40 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by FIREchief »

TomatoTomahto wrote: Wed May 19, 2021 8:36 am Thank you for stating this. I bring it up often in these threads, but it’s tiring. I am always surprised that it has to be stated on BH, whose membership is “ethical to the max,” and happy to remind everyone of that.

I would feel miserable if my short-sightedness and stinginess had prevented financial compensation for whatever harm I’d caused. We have as much umbrella as the company will give us.
Great reminder TomatoTomahto! :beer
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
Freefun
Posts: 804
Joined: Sun Jan 14, 2018 3:55 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Freefun »

climber2020 wrote: Wed May 19, 2021 7:56 am
HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
You may not even qualify for an umbrella policy.

I was not able to obtain one from my insurance company when I was a renter; it was only after buying a house that I became eligible.
Some insurance companies provide umbrella policies but you need to have renters insurance with sufficient limits.
Remember when you wanted what you currently have?
User avatar
HanSolo
Posts: 380
Joined: Thu Jul 19, 2012 3:18 am

Re: Don’t need a PUP? [personal umbrella policy]

Post by HanSolo »

Freefun wrote: Wed May 19, 2021 2:42 pm
climber2020 wrote: Wed May 19, 2021 7:56 am
HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
You may not even qualify for an umbrella policy.

I was not able to obtain one from my insurance company when I was a renter; it was only after buying a house that I became eligible.
Some insurance companies provide umbrella policies but you need to have renters insurance with sufficient limits.
Before I consider buying, I want to understand how it's been useful in actual cases (not just in theory) for people in my situation.

Considering a person who never drives at all (no cars, no rental cars, no motorcycles, no bicycles), and doesn't own a car or house (or any kind of vehicle or real estate), nor having any kids or pets (no pit bulls, beehives, etc.), and living in an apartment building (no sidewalks or yards to take care of)... does anyone know of any actual cases where an umbrella was (or would have been) useful?

If so, how did the case turn out?
Freefun
Posts: 804
Joined: Sun Jan 14, 2018 3:55 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Freefun »

HanSolo wrote: Wed May 19, 2021 5:50 pm
Freefun wrote: Wed May 19, 2021 2:42 pm
climber2020 wrote: Wed May 19, 2021 7:56 am
HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
You may not even qualify for an umbrella policy.

I was not able to obtain one from my insurance company when I was a renter; it was only after buying a house that I became eligible.
Some insurance companies provide umbrella policies but you need to have renters insurance with sufficient limits.
Before I consider buying, I want to understand how it's been useful in actual cases (not just in theory) for people in my situation.

Considering a person who never drives at all (no cars, no rental cars, no motorcycles, no bicycles), and doesn't own a car or house (or any kind of vehicle or real estate), nor having any kids or pets (no pit bulls, beehives, etc.), and living in an apartment building (no sidewalks or yards to take care of)... does anyone know of any actual cases where an umbrella was (or would have been) useful?

If so, how did the case turn out?
Sorry, I have no data on actual use cases.

I was responding to the issue of renters not qualifying for umbrella insurance. My insurer (Geico) told me they would continue my policy if I sold my home and rented, providing I had acceptable renters insurance.

It sounds like you have little risk so perhaps no need for a policy. I'm guessing that most people with such policies don't actually "use" them... these cover you for worst case scenarios ... you hope to never need it but glad to have it if needed.
Remember when you wanted what you currently have?
todaysBob
Posts: 90
Joined: Mon Mar 02, 2020 6:39 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by todaysBob »

My neighbor's 8 year old broke my Q7's windshield few days back. That would be something covered by the Umbrella Policy? Although its only $2k but throwing it out as an example.
Hues10
Posts: 8
Joined: Wed Mar 18, 2020 6:11 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Hues10 »

Funny, I asked about obtaining PUP a couple of days ago for someone who does have net worth in non-taxable accounts in six figures. The response was yes, which makes sense to me as right now I have $300k liability. Now the question is how much coverage? Is $1m adequate? I received a quote from Progressive for $2m coverage for about $650/year, which seems expensive given one poster indicated they pay $150 for $1m coverage.
hachiko
Posts: 211
Joined: Fri Mar 17, 2017 1:56 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by hachiko »

todaysBob wrote: Thu May 20, 2021 2:37 am My neighbor's 8 year old broke my Q7's windshield few days back. That would be something covered by the Umbrella Policy? Although its only $2k but throwing it out as an example.
It would probably be covered by their homeowner's policy. If they don't have a liability policy it may be covered by your auto or homeowner property coverage. It's certainly not covered by your liability policies.
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

Hues10 wrote: Thu May 20, 2021 5:55 am Funny, I asked about obtaining PUP a couple of days ago for someone who does have net worth in non-taxable accounts in six figures. The response was yes, which makes sense to me as right now I have $300k liability. Now the question is how much coverage? Is $1m adequate? I received a quote from Progressive for $2m coverage for about $650/year, which seems expensive given one poster indicated they pay $150 for $1m coverage.
at usaa my "first year" was 400 for $1M and then it went to 300 at the renewal.
Silverado
Posts: 704
Joined: Fri Oct 18, 2013 6:07 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Silverado »

Vettepilot wrote: Tue May 18, 2021 8:50 pm PI lawyer here. Generally, we do only go after insurance. But in cases where the insurance limits are insufficient and the defendant has significant assets, I have an ethical obligation to pursue recovery for my client. Part of this decision is also based on whether the defendant carried reasonable insurance. If the D had a large taxable account or cash in the bank, but chose to carry state minimum auto limits, I'm going after his assets. If he had the same assets, but chose to carry 500k limits, he has taken reasonable steps to protect others, and that weighs in the decision I'm going to make with my client.

I personally carry a large umbrella policy. Also very high undersinsured/uninsured limits. I have seen both come in handy.
Such a sad reminder of the state of our world where the size of my wallet changes how my actions are judged. Such is the degradation...

I really like the statement and viewpoint of umbrella being there to provide for someone who was hurt by my actions. I’ll try to focus on that.

We added a couple million last year mainly because of how cheap it is.
AnEngineer
Posts: 559
Joined: Sat Jun 27, 2020 4:05 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by AnEngineer »

HanSolo wrote: Wed May 19, 2021 5:50 pm
Freefun wrote: Wed May 19, 2021 2:42 pm
climber2020 wrote: Wed May 19, 2021 7:56 am
HanSolo wrote: Wed May 19, 2021 3:31 am I never thought about umbrella policies and don't really understand them.

I don't drive, or own a car or a house.

Where's the line between people who need an umbrella and people who don't?
You may not even qualify for an umbrella policy.

I was not able to obtain one from my insurance company when I was a renter; it was only after buying a house that I became eligible.
Some insurance companies provide umbrella policies but you need to have renters insurance with sufficient limits.
Before I consider buying, I want to understand how it's been useful in actual cases (not just in theory) for people in my situation.

Considering a person who never drives at all (no cars, no rental cars, no motorcycles, no bicycles), and doesn't own a car or house (or any kind of vehicle or real estate), nor having any kids or pets (no pit bulls, beehives, etc.), and living in an apartment building (no sidewalks or yards to take care of)... does anyone know of any actual cases where an umbrella was (or would have been) useful?

If so, how did the case turn out?
This kind of thinking will lead to underinsuring (though possibly not relevant to this particular case). Insurance is at its best for rare devastating events and there's a first time for everything.
Jags4186
Posts: 5789
Joined: Wed Jun 18, 2014 7:12 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Jags4186 »

I think just because something is cheap doesn't mean it is always a good buy. Umbrella insurance is very cheap for lots of coverage. It is very cheap for lots of coverage because it's almost never used. Having been around PI attorneys much of my life, I know that those commercials where you see beautiful people saying "Salino and Barns got me $1.7 million dollars for my car accident!" are a little ridiculous. For someone to get $1.7mm for a car accident they must have been a very high wage earner who lost all their limbs and the ability to speak against someone who had very high carrier limits (say a commercial trucking company). I mean, if you're in the situation the OP proposed where you ram into a van killing 15 people, there's a good chance you're a goner as well.

Certainly, weigh the pros and cons of it, but don't throw good money away.

Personally when I look at our insurance costs we are spending near 8% of our gross income on insurance premiums - between life, car, home owners, dental, and high deductible health insurance. Certainly that number goes down for folks with tons and tons of income as those costs are somewhat fixed, but I can't imagine adding an additional several $100 a month for an individual disability policy outside of the one provided by my employer and another couple of hundred for an umbrella policy.
AnEngineer
Posts: 559
Joined: Sat Jun 27, 2020 4:05 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by AnEngineer »

Jags4186 wrote: Thu May 20, 2021 7:48 am I think just because something is cheap doesn't mean it is always a good buy. Umbrella insurance is very cheap for lots of coverage. It is very cheap for lots of coverage because it's almost never used. Having been around PI attorneys much of my life, I know that those commercials where you see beautiful people saying "Salino and Barns got me $1.7 million dollars for my car accident!" are a little ridiculous. For someone to get $1.7mm for a car accident they must have been a very high wage earner who lost all their limbs and the ability to speak against someone who had very high carrier limits (say a commercial trucking company). I mean, if you're in the situation the OP proposed where you ram into a van killing 15 people, there's a good chance you're a goner as well.

Certainly, weigh the pros and cons of it, but don't throw good money away.

Personally when I look at our insurance costs we are spending near 8% of our gross income on insurance premiums - between life, car, home owners, dental, and high deductible health insurance. Certainly that number goes down for folks with tons and tons of income as those costs are somewhat fixed, but I can't imagine adding an additional several $100 a month for an individual disability policy outside of the one provided by my employer and another couple of hundred for an umbrella policy.
Umbrella should be more like a couple hundred a year, not month. It should be by far the cheapest insurance you buy.
Jags4186
Posts: 5789
Joined: Wed Jun 18, 2014 7:12 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Jags4186 »

AnEngineer wrote: Thu May 20, 2021 7:54 am
Jags4186 wrote: Thu May 20, 2021 7:48 am I think just because something is cheap doesn't mean it is always a good buy. Umbrella insurance is very cheap for lots of coverage. It is very cheap for lots of coverage because it's almost never used. Having been around PI attorneys much of my life, I know that those commercials where you see beautiful people saying "Salino and Barns got me $1.7 million dollars for my car accident!" are a little ridiculous. For someone to get $1.7mm for a car accident they must have been a very high wage earner who lost all their limbs and the ability to speak against someone who had very high carrier limits (say a commercial trucking company). I mean, if you're in the situation the OP proposed where you ram into a van killing 15 people, there's a good chance you're a goner as well.

Certainly, weigh the pros and cons of it, but don't throw good money away.

Personally when I look at our insurance costs we are spending near 8% of our gross income on insurance premiums - between life, car, home owners, dental, and high deductible health insurance. Certainly that number goes down for folks with tons and tons of income as those costs are somewhat fixed, but I can't imagine adding an additional several $100 a month for an individual disability policy outside of the one provided by my employer and another couple of hundred for an umbrella policy.
Umbrella should be more like a couple hundred a year, not month. It should be by far the cheapest insurance you buy.
I know. Poorly worded but thats what I meant. I’m not interested in adding another couple hundred dollars a year to my insurance premiums when the likelihood of me causing a $500k+ issue due to pure negligence is essentially 0.
Last edited by Jags4186 on Thu May 20, 2021 7:58 am, edited 1 time in total.
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

Jags4186 wrote: Thu May 20, 2021 7:48 am Personally when I look at our insurance costs we are spending near 8% of our gross income on insurance premiums - between life, car, home owners, dental, and high deductible health insurance. Certainly that number goes down for folks with tons and tons of income as those costs are somewhat fixed, but I can't imagine adding an additional several $100 a month for an individual disability policy outside of the one provided by my employer and another couple of hundred for an umbrella policy.
You are more likely to need disability coverage to replace lost wages, then you need life insurance.
Jags4186
Posts: 5789
Joined: Wed Jun 18, 2014 7:12 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Jags4186 »

Soon2BXProgrammer wrote: Thu May 20, 2021 7:57 am
Jags4186 wrote: Thu May 20, 2021 7:48 am Personally when I look at our insurance costs we are spending near 8% of our gross income on insurance premiums - between life, car, home owners, dental, and high deductible health insurance. Certainly that number goes down for folks with tons and tons of income as those costs are somewhat fixed, but I can't imagine adding an additional several $100 a month for an individual disability policy outside of the one provided by my employer and another couple of hundred for an umbrella policy.
You are more likely to need disability coverage to replace lost wages, then you need life insurance.
Correct and I have that through my employer. I think people spend too much on insurance. Not saying it’s all bad, but spending over 10% of my income on insurance is too much.
Carguy85
Posts: 513
Joined: Thu Mar 19, 2020 6:26 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Carguy85 »

michaeljc70 wrote: Wed May 19, 2021 8:44 am I think your neighbor is giving general advice that applies to most situations because most people have nothing in recoverable assets. Most people, if they have anything, have a residence and/or retirement accounts.
BINGO
Bobby206
Posts: 549
Joined: Fri Oct 05, 2018 4:01 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Bobby206 »

Soon2BXProgrammer wrote: Tue May 18, 2021 10:43 pm
Bobby206 wrote: Tue May 18, 2021 9:33 pm
Soon2BXProgrammer wrote: Tue May 18, 2021 8:53 pm If you have significant assets (including future income), one would be short sighted to not have at least a $1M umbrella.
I would say $2m or $3m at least. It's pennies for each extra million.
I'm not saying that one shouldn't buy more then $1M, just that the first million has a ton of value/utility even if you don't already have significant assets. Definitely, if one has multiple millions of dollars outside of ERISA accounts, they should consider matching that exposed wealth to their umbrella size. (and they can obviously afford it)
I hear ya but I don't agree with the logic that the size of the umbrella has a relation to the size of your assets. If I have $100k in assets I don't want a lawsuit to take that $100k in assets. Having $2m or $3m of umbrella covers you against any reasonable risk of a lawsuit exceeding policy limits. Sure freak situations could happen that cause more damage but generally $2m or $3m should cover the situation and your assets, whatever the amount, would be protected.
User avatar
CenTexan
Posts: 80
Joined: Wed Jun 07, 2017 8:02 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by CenTexan »

Ah - it all seems to boil down to How Much Risk Do You Want To Assume?

Very similar to owning individual stocks, yes? :)
AnEngineer
Posts: 559
Joined: Sat Jun 27, 2020 4:05 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by AnEngineer »

Bobby206 wrote: Thu May 20, 2021 8:48 am
Soon2BXProgrammer wrote: Tue May 18, 2021 10:43 pm
Bobby206 wrote: Tue May 18, 2021 9:33 pm
Soon2BXProgrammer wrote: Tue May 18, 2021 8:53 pm If you have significant assets (including future income), one would be short sighted to not have at least a $1M umbrella.
I would say $2m or $3m at least. It's pennies for each extra million.
I'm not saying that one shouldn't buy more then $1M, just that the first million has a ton of value/utility even if you don't already have significant assets. Definitely, if one has multiple millions of dollars outside of ERISA accounts, they should consider matching that exposed wealth to their umbrella size. (and they can obviously afford it)
I hear ya but I don't agree with the logic that the size of the umbrella has a relation to the size of your assets. If I have $100k in assets I don't want a lawsuit to take that $100k in assets. Having $2m or $3m of umbrella covers you against any reasonable risk of a lawsuit exceeding policy limits. Sure freak situations could happen that cause more damage but generally $2m or $3m should cover the situation and your assets, whatever the amount, would be protected.
While they shouldn't necessarily match, there's certainly a relationship. You want someone suing you to look at the options of a guaranteed settlement amount (at policy limits) vs. the possible higher amount (policy limits plus unprotected assets) and not be attracted by the higher amount of the latter.
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

Bobby206 wrote: Thu May 20, 2021 8:48 am
Soon2BXProgrammer wrote: Tue May 18, 2021 10:43 pm the first million has a ton of value/utility even if you don't already have significant assets
If I have $100k in assets I don't want a lawsuit to take that $100k in assets.
Its hard enough to get people without significant assets to have "sufficient underlying coverages" let alone buy an umbrella policy. As i stated, the first million has a ton of value, this means you probably have 1.3 or 1.5M in liability coverage. That goes a long way if you don't have a lot of exposed assets.
AnEngineer
Posts: 559
Joined: Sat Jun 27, 2020 4:05 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by AnEngineer »

Soon2BXProgrammer wrote: Thu May 20, 2021 9:34 am
Bobby206 wrote: Thu May 20, 2021 8:48 am
Soon2BXProgrammer wrote: Tue May 18, 2021 10:43 pm the first million has a ton of value/utility even if you don't already have significant assets
If I have $100k in assets I don't want a lawsuit to take that $100k in assets.
Its hard enough to get people without significant assets to have "sufficient underlying coverages" let alone buy an umbrella policy. As i stated, the first million has a ton of value, this means you probably have 1.3 or 1.5M in liability coverage. That goes a long way if you don't have a lot of exposed assets.
? Umbrella coverage is (usually?) an up to amount, not on top of. Where's the extra $0.3-0.5M?
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

AnEngineer wrote: Thu May 20, 2021 10:00 am
Soon2BXProgrammer wrote: Thu May 20, 2021 9:34 am
Bobby206 wrote: Thu May 20, 2021 8:48 am
Soon2BXProgrammer wrote: Tue May 18, 2021 10:43 pm the first million has a ton of value/utility even if you don't already have significant assets
If I have $100k in assets I don't want a lawsuit to take that $100k in assets.
Its hard enough to get people without significant assets to have "sufficient underlying coverages" let alone buy an umbrella policy. As i stated, the first million has a ton of value, this means you probably have 1.3 or 1.5M in liability coverage. That goes a long way if you don't have a lot of exposed assets.
? Umbrella coverage is (usually?) an up to amount, not on top of. Where's the extra $0.3-0.5M?
Umbrella coordinates with underlying coverage of your auto/home/boat/snowmobile/etc liability policies. Think of it as a top hat. this is why umbrellas have requirements for underlying policies. It reduces the risk of the umbrella actually paying. a $1M umbrella is on top of, not in replacement of, the $300k auto policy as an example. (or whatever your company required)

This is a good picture... https://www.geico.com/information/about ... uirements/ (ignore the actual amounts and substitute yours)
simplextableau
Posts: 52
Joined: Wed Oct 05, 2016 9:20 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by simplextableau »

Umbrella insurance also typically covers defamation claims. I know someone who was sued for defamation along with a host of other claims. Because defamation was one of the claims and was covered under the umbrella policy, the umbrella insurer spent hundreds of thousands of dollars paying legal counsel to defend the whole lawsuit. Then it settled for a few hundred thousand more. That was all paid by insurance.
AnEngineer
Posts: 559
Joined: Sat Jun 27, 2020 4:05 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by AnEngineer »

Soon2BXProgrammer wrote: Thu May 20, 2021 10:13 am
AnEngineer wrote: Thu May 20, 2021 10:00 am
Soon2BXProgrammer wrote: Thu May 20, 2021 9:34 am
Bobby206 wrote: Thu May 20, 2021 8:48 am
Soon2BXProgrammer wrote: Tue May 18, 2021 10:43 pm the first million has a ton of value/utility even if you don't already have significant assets
If I have $100k in assets I don't want a lawsuit to take that $100k in assets.
Its hard enough to get people without significant assets to have "sufficient underlying coverages" let alone buy an umbrella policy. As i stated, the first million has a ton of value, this means you probably have 1.3 or 1.5M in liability coverage. That goes a long way if you don't have a lot of exposed assets.
? Umbrella coverage is (usually?) an up to amount, not on top of. Where's the extra $0.3-0.5M?
Umbrella coordinates with underlying coverage of your auto/home/boat/snowmobile/etc liability policies. Think of it as a top hat. this is why umbrellas have requirements for underlying policies. It reduces the risk of the umbrella actually paying. a $1M umbrella is on top of, not in replacement of, the $300k auto policy as an example. (or whatever your company required)

This is a good picture... https://www.geico.com/information/about ... uirements/ (ignore the actual amounts and substitute yours)
Huh, I'm pretty sure mine doesn't work that way, but I'll have to double check sometime.
atlgenxennial
Posts: 71
Joined: Tue Jul 11, 2017 1:45 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by atlgenxennial »

Lee_WSP wrote: Wed May 19, 2021 12:41 pm
badger42 wrote: Wed May 19, 2021 8:34 am
Your homeowners or renters policy is the policy that covers personal liability arising from non-auto, non-boat incidents.
would homeowners cover an event that occurs off premise?
hachiko
Posts: 211
Joined: Fri Mar 17, 2017 1:56 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by hachiko »

Silverado wrote: Thu May 20, 2021 7:17 am
Vettepilot wrote: Tue May 18, 2021 8:50 pm PI lawyer here. Generally, we do only go after insurance. But in cases where the insurance limits are insufficient and the defendant has significant assets, I have an ethical obligation to pursue recovery for my client. Part of this decision is also based on whether the defendant carried reasonable insurance. If the D had a large taxable account or cash in the bank, but chose to carry state minimum auto limits, I'm going after his assets. If he had the same assets, but chose to carry 500k limits, he has taken reasonable steps to protect others, and that weighs in the decision I'm going to make with my client.

I personally carry a large umbrella policy. Also very high undersinsured/uninsured limits. I have seen both come in handy.
Such a sad reminder of the state of our world where the size of my wallet changes how my actions are judged. Such is the degradation...

I really like the statement and viewpoint of umbrella being there to provide for someone who was hurt by my actions. I’ll try to focus on that.

We added a couple million last year mainly because of how cheap it is.
Do you think this has changed over the last, let's say, 60 years?
Soon2BXProgrammer
Posts: 2235
Joined: Mon Nov 24, 2014 11:30 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by Soon2BXProgrammer »

AnEngineer wrote: Thu May 20, 2021 10:33 am Huh, I'm pretty sure mine doesn't work that way, but I'll have to double check sometime.
I haven't seen an umbrella that replaces the underlying coverage, or treats the underlying coverage as part of its total limit.. (i am sure they might exist, but that would be very uncommon).

Now, lets say you owned a boat, and had an umbrella, but didn't have a boat liability policy... You might be on the hook for the first $300k before your umbrella pays.
User avatar
F150HD
Posts: 3759
Joined: Fri Sep 18, 2015 7:49 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by F150HD »

I'd like to hear of experiences with future wage garnishment for folks who did not have an umbrella in a given scenario
hachiko
Posts: 211
Joined: Fri Mar 17, 2017 1:56 pm

Re: Don’t need a PUP? [personal umbrella policy]

Post by hachiko »

atlgenxennial wrote: Thu May 20, 2021 10:38 am
Lee_WSP wrote: Wed May 19, 2021 12:41 pm
badger42 wrote: Wed May 19, 2021 8:34 am
Your homeowners or renters policy is the policy that covers personal liability arising from non-auto, non-boat incidents.
would homeowners cover an event that occurs off premise?
Generally yes, though of course it could depend on the policy, and maybe the state as well.
Post Reply