gatrhumpy

iTrader: (1)

I thought about getting a $1M umbrella policy to protect me and my family, but my lawyer sister said they were a waste of time, and that a lawyer would only sue us up to the amount for which we're covered. She also said that we would more likely be sued if we had a $1M insurance policy.

My concern was that we could be personally liable for medical bills/whatnot above and beyond our insurance coverages. I know that's true. But what doesn't make sense was that she also said that if medical bills for the other party exceeded the insurance coverage (say $500,000), and our house is underwater and we only have a certain amount in savings and retirement, that the other party would not sue because we would have no money/assets. That's where I disagreed. Could another party sue us and put us out on the street?

Do you have an umbrella insurance policy?

AZuser

I think Surfer Rick has one.

Greggsg

I had it. I will actually be getting it again. I got mine from Geico and it was about $350 for a year. I it covers you for liability for you in general, not just auto. it also adds to your under/un insured motorist coverate. I was hit by a person with only $10k coverage from the rear and might have to hit that as well as the regular coverage I had.

It is MUCH cheaper to get the umbrella for $1,000,000 than to stack the coverage on three cars and have less coverage.

Gregg

Will Y.

The $226 yearly premium we pay for the umbrella policy is a no-brainer, as we have lots of equity, a few assets and no debt.

In California, your sister would generally be incorrect-- a plaintiff will not know the extent of an individual defendant's insurance coverage until after a lawsuit has been filed and information is correspondingly sought. Insurers will not tell a claimant the policy limits unless it is making a policy-limits offer (usually in a serious/expensive injury or death case).
Lawsuits in unlimited courts in California (over $25,000) are filed for damages "according to proof," and not for a specific amount.

Plaintiff's lawyers generally will agree to take the policy limits rather than seek an additional amount from the policyholder UNLESS it is an unusual case (DUI, very high damages, high-net-worth defendant(s) with low insurance, etc.). Otherwise, the insurer will defend an excess claim tooth-and-nail to avoid exposing its insured to an excess judgment and potential bad faith claim.
In those exceptional cases, a plaintiff could sue you and get a judgment above policy limits, but there are various exemptions to judgments and bankruptcy that protect you from being tossed onto the street-- particularly in FL, IIRC: see OJ Simpson.

I recall that being mentioned in a couple of threads.

gatrhumpy

iTrader: (1)

I was hoping you would pipe in on this.

For USAA, the insurance policy for $1M would be $131 a year, a little over $11 a month. I wanted to get it, but my wife (and her lawyer sister) adamantly disagreed.

So in FL, how would someone know that I have this umbrella policy? Would they be more likely to sue if they knew I had this policy? I own a house, cars, retirement accounts, etc. but I estimate my net worth to be less than $110K because of the large amount of money we're up-side-down on our mortgage (~$70K upside down).

So if we got sued for $2M and the plantiff won, could they take our house, cars, retirement accounts, savings accounts, etc.? Where would they put us if they took our house? How much of a percentage could they potentially garnish my wages?

1islandparadise

I'm also with USAA.

paz840

iTrader: (2)

I have a $1M umbrella policy w/State Farm. $165/yr.

Will Y.

That's a great premium, compared to mine.

I don't know FL insurance regs or practices-- best to call your agent to ask if someone (not connected to insurance) can find out your insurance policy limits info before they file a lawsuit.

Policy limits info is not available in CA prior to litigation. In CA, lawyers considering filing a lawsuit will look at their client's damages; the amount of insurance coverage doesn't play a large part in the decision because we will initially only know if the potential defendant is insured or not (due to vehicle code and commercial requirements). If the potential defendant is an individual, we look at records of other assets to determine if a case is worth pursuing, as with a business contract claim, which is generally not covered by insurance.
Most personal injuries will come within regular policy limits if it's a homeowner or $100+K vehicle liability policy. An umbrella policy won't generally come into play if you rear-ended and injured someone with soft-tissue damage or a broken leg or arm. It's major damages (running over and disabling a plastic surgeon in your driveway...) or death where the umbrella policy helps.

Certain assets are exempt from collection by judgment debtors and bankruptcy creditors, particularly retirement accounts (which is why I mentioned OJ, who has a $30+ million judgment against him, but millions in retirement accounts). CA has exemption limits on the primary residence, necessary cars and wages.
You need to check a FL lawyer or accountant, but I think the entirety of the primary residence is exempt from judgment there. The amount of wages subject to garnishment varies in CA, but IDK if that's also the case in FL.

Just buy the darn umbrella-- tell your wife some troll on the interwebz said so while he was browsing for nudez.

Greggsg

I do live in Florida and I think I paid about $300 per year to Geico. When I was rear ended by a girl who only had the $10,000 minimum coverage. She sued me. The first thing her lawyers did was request my insurance information from Geico. Geico had to by law tell them what my coverage was. When the insurance company has a lot to lose, they will spend a lot to defend me. They hired an accident re-constructionist and everything. Finally the girl dropped the case.

With that said, I have back, neck and knee injuries and had surgery on my knee last week. You can also use the same coverage if you get hurt, as it included uninsured / under insured motorist coverage. That means that if I lost a limb or had become totally disabled, that whole pie is available for my medical bills and such.

Also, Florida is a homestead state, so they can never take your house, but they can try and put a lien on it that may or may not need to be paid out of the proceeds if and when you sell your house. In Florida they are not allowed to take your car, home, boat and tools of your trade.

Gregg

achenator

Pay almost $900 a year for 2 million in La. Fuggin sue happy state

ttribe

I have one; about $350/yr. in Arizona for $1M through State Farm.

gatrhumpy

iTrader: (1)

I think USAA saw the most recent accident on my record, and they bumped up the policy cost from $131 a year to about $211.

I probably won't buy this.

dallison

We have 1m with sf and it's about $175 yr.

Jiggy2dmax

iTrader: (1)

I do also, 1M through 21st Century, $265 a yr

$20 bucks a month is worth the piece of mind.

LaCostaRacer

I'm looking at my policy renewal with RLI Insurance.

1M - $253
2M - $455
3M - $607
5M - $797

People will sue you if you're at fault and have assets to cover the judgement or have an income that can be garnished for many years into the future. If you're a 70yr old with no assets, it wouldn't make a lot of sense having an Umbrella. If you're a 40 yr old with a 1M in assets and decent income then it does.

Gatrhumpy: what your sister may have failed to tell you is if you get sued and have a Umbrella, you can count on a vigorous defense from both your Auto/Home insurance Company AND your Umbrella policy. Those guys will defend you because they don't want to pay up and you're most likely to settle for less than your umbrella policy because of this defense. Without the Umbrella, you can blow through your Auto/Home insurance pretty quick and wind up losing assets or paying for a long time. That's because you insurance will only pay the limit and you would be under-insured. The insurance company will simply pay the claim and let you defend yourself.

With that said, $455 for a $2M policy doesn't really sound that bad- that's probably equal to or less than car insurance runs for a single car.

clpassenubye

iTrader: (20)

In my opinion its very shortsided to say that you would only be sued for your policy limits or that your more likely to be sued if you have a 1M or more umbrella those assumptions are simply not true. There are many things that you could be sued for not just car accidents, it could be for defamation of character, someone drowning in your pool, or a minor getting seriously injured or killed in your custody etc.

It really depends on the claim but the other parties attorneys don't always know initially know if you have an umbrella policy . Many times the other parties attorneys don't even know what your underlying policy limits are at least until they try to negotiate a settlement.

I have seen many times where people that don't have a great amount of assets be sued and have judgements against them where their wages are garnished or they have to make payment arrangements to pay the judgement whether that be getting loans etc. I have seen some that have unsatisfied judgements where the suing party can file with the DMV to have the persons license suspended and they have to carry a filing for 10 years and renegotiate payment arrangements to get their license back.

An Umbrella is a way to have greater peace of mind whether you have a lot or not remember $1 million isn't huge amount of money anymore especially if your dealing with medical bills for someone that has injuries that will affect them for the rest of their lives.

As you can see the prices for an umbrella policy aren't very much and like LaCostaRacer said the insurance company will give you a vigorous defense one that you might not have the resources to pay for yourself otherwise.