Umbrella insurance

[mranski]

In Canada, I haven't been able to convince myself it is worth buying. In BC, you can easily get $5 million limits on auto and home quite inexpensively. All business related activity is excluded to my knowledge. So it doesn't seem worth it to buy it just to increase these limits?

[Spekulatius]

In the US, with  those frivolous lawsuits for damages, 500k can just be as insufficient than $10 million. I had a great insurance agent in CA that answered  the question for sufficient coverage that way:

 

You just need sufficient coverage that the insurance company fights tooth and nails with good lawyers for settlement. The counterparts knows that it is way easier to get a settlement from the insurance company than a cash payment from an individual. I settled for $1Mill umbrella. I don’t think  her $1mill or $2mill makes much of a difference.

 

You should never disclose your insurance, much less your limit to the counterparty.

[Brice]

A bit of an uncommon issue but since we're dealing with ~2bp risks here I'll throw it out: higher limits don't always increase an insurer's desire to defend you and can be counter productive if damages are clearly above the limits of the policy but odds of culpability being assessed are <100%.  In these cases, the insurer is inclined to litigate all the way to judgement knowing that it's max loss is capped at limit+costs while a favorable judgement will limit its payout to just costs.  Some states have rules that can expand insurers' liability beyond limits if they refuse to settle within the limits due to just this issue but many states don't have such rules.

 

Oregon, my old home state, doesn't have such rules and it caused a couple of strange mediation moments in a case I was involved in last year.  We emphasized the cost of the litigation itself as opposed to the desired damages as the policy limits were ~30% of the expected damage award range and the case was probably a toss-up in front of a jury.

 

You should never disclose your insurance, much less your limit to the counterparty.

 

Often comes out early in the disclosure process.  If not, I always see mediators guide the parties to a small range.  I've got a small sample size (and hope to keep it that way) but ir's been 100% thus far.

[KJP]

A bit of an uncommon issue but since we're dealing with ~2bp risks here I'll throw it out: higher limits don't always increase an insurer's desire to defend you and can be counter productive if damages are clearly above the limits of the policy but odds of culpability being assessed are <100%.  In these cases, the insurer is inclined to litigate all the way to judgement knowing that it's max loss is capped at limit+costs while a favorable judgement will limit its payout to just costs.  Some states have rules that can expand insurers' liability beyond limits if they refuse to settle within the limits due to just this issue but many states don't have such rules.

 

Oregon, my old home state, doesn't have such rules and it caused a couple of strange mediation moments in a case I was involved in last year.  We emphasized the cost of the litigation itself as opposed to the desired damages as the policy limits were ~30% of the expected damage award range and the case was probably a toss-up in front of a jury.

 

You should never disclose your insurance, much less your limit to the counterparty.

 

Often comes out early in the disclosure process.  If not, I always see mediators guide the parties to a small range.  I've got a small sample size (and hope to keep it that way) but ir's been 100% thus far.

 

On this point, google Federal Rule of Civil Procedure 26(a)(1)(A)(iv).  Many U.S. states have similar rules in civil cases.

 

I can't speak for Oregon, but many states provide insureds with statutory or common law remedies against their insurers in the event an insurer's unreasonable refusal to settle a lawsuit results in the insured being hit with a judgment that exceeds his or her remaining policy limit.  Google "insurance bad faith," or more specifically "third-party bad faith".

[redhots]

I just did a quick quote on USAA.  $43.58/month for 1 million.    $65.36/month for 2 million. 

 

A year later.  I did another quote on USAA.  $30.46/month for 1 million.    $45.70/month for 2 million. 

[boilermaker75]

I just did a quick quote on USAA.  $43.58/month for 1 million.    $65.36/month for 2 million. 

 

A year later.  I did another quote on USAA.  $30.46/month for 1 million.    $45.70/month for 2 million.

 

I'm obviously paying way too much with GEICO.

[redhots]

You are joking, right?    $5 million at USAA for me $91.40/Month or $1,096.74 a year

[boilermaker75]

You are joking, right?    $5 million at USAA for me $91.40/Month or $1,096.74 a year

 

I misread, I thought that was per year, not per month. My GEICO is a good deal.

[bookie71]

I just paid my 1,000,000 general liability policy from State Farm, it was 184 for one year.

[randomep]

$25 for 1M??? Where can I get such rate??

 

I'm in Massachusetts. A year or so ago got quote for $380 for 1M, $680 for 2M from Geico-recommended company (Geico does not offer umbrella in MA).

 

AAA insurance quoted $200 for 1M but only if I transfer all my house/car insurance to them. I have house insurance with them, but they refused to offer umbrella if the car insurance was elsewhere.

 

Might be MA, but these prices seemed very steep for me.

 

I think the OP should have said $25/month, that's what I presume he meant.

 

[Spekulatius]

Geico‘s quote for $1M Umbrella went to ~$370 annually. Too much for me - I got a quote from my insurance broker for less than half that from a mutual insurer I have my house insured with.

 

The differences for exactly the same thing are striking. I know that I had quotes from Geico for <$200 a few years ago. A lot of the mutual insurance companies in New England are very competitive.

[boilermaker75]

Geico‘s quote for $1M Umbrella went to ~$370 annually. Too much for me - I got a quote from my insurance broker for less than half that from a mutual insurer I have my house insured with.

 

The differences for exactly the same thing are striking. I know that I had quotes from Geico for <$200 a few years ago. A lot of the mutual insurance companies in New England are very competitive.

 

Our GEICO umbrella came due late September. It was $812 up from $756 last year for $5 million.

[Peregrino]

The General rule of thumb I have used when deciding how much umbrella coverage to get is net worth plus the npv of future earnings.  I believe that your ability to pay will factor into how much a court saddles you with in fines, so this level will leave you well covered.

[benhacker]

Farmer's quoted $480 / year for $2m.

[fareastwarriors]

I pay $255/year for $1 million umbrella from Safeco in California. I do have car and home insurance with Safeco as well...