Umbrella Insurance of $1M or Auto/Home Policy coverage of $1M

Law has changed. Insurance covered the car not the drivers. Unless specifically excluded in the insurance, relatives and friends are covered. Thieves are not.

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You’re all wet buddy. I highly recommend you speak with your insurance agent to obtain a better grasp of your coverage.

There has been no law change. There are coverages that follow the car and coverages that follow the driver.

By the way, go ahead and try to have your licensed child excluded on your own insurance policy when they live in your house. It can be done in the right circumstances but It’s almost impossible as long as they live under your roof. I’ve had many friends attempt it when their teenager got a license and they found out what it costs to insure a teenage driver on their policy. HIgh risk=high premiums.

My point was a counterpoint to the argument that if one had a large umbrella policy, there would be no risk because the “insurer would take care of” any claim. That’s a fallacy. Insurers do not just bend down and take care of claims against you because you have liability coverage. If they can find away out of covering it, they will.

This is the reason behind the cost of UM coverage is frequently more than cost of collision coverage when they are essentially covering the same thing in two different scenarios. Your insurance company is more afraid of you coming back on them for lost wages and injuries than they are of having to pay for repairs for the damage to your car because you were involved in an accident with an uninsured motorist.

My little sister was a “thief” only in the eyes of the family. To the insurance company and the rest of the world, she was just a teenager going joy ridding in her daddy’s car. She was covered under my parents policy to drive any of their cars. But that old Buick was my father’s pride and joy so we were only allowed to drive it with his permission and on special occasions. For instance, I was allowed to use it to chaefuer my date and another couple to our Junior Prom.

If you insist, you’re right then you’re right. I have enough recent experience to know what it is.

I forgot all the details, but there’s a different coverage for drivers. One is related to home insurance, and the other to the vehicle itself.

I wonder if any of you guys try to have Umbrella policy > 1M? I am debating to increase my limit to 2M from 1M. It is just extra 120 / yr, maybe I can sleep better.

I just increased it to 2M yesterday. You guys scared me…

Just called and upppedddd. I’ll sleep like a baby tonight.

You won’t regret it. Peace of mind is worth $millions. :wink:

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At what cost manch?

Remember Buffet’s most famous mantra… :fearful: :smile_cat:

Cost is only $100 more a year.

I don’t care about the probability of lawsuits or claims being paid. That seems to be your argument why umbrella insurance is useless? All I care is I am not the one paying the claim.

manch:

$100/year would be ridiculously cheap.

As a CFO, I am responsible for our risk management at work.

I added $1M to our umbrella coverage this year. The cost was $4,000 for that additional $1M coverage.

We average about two claims per month filed against us. It’s the price of being a $25 million per year public agency with a net book value of about twice that.

Although these claims are frequently referred to as “lawsuits” they almost never actually get that far. Most are without any semblance of merit. They are usually filed by ambulance chasing attorneys on behalf of people who were not even present when something occurred that they are claiming having been involved in. Or in spite of the people’s own responsibility in the matter.

Our insurer’s often pay them off for $10,000 or $20,000 which these attorneys know going in. It’s very frustrating.

It’s also your tax dollars at work.

The figures I remember being quoted from my SF agent for a $1M umbrella for my personal use were more in the $300/year range. For $100 I’d certainly be more amenable.

And, I did not mean to say they are useless. Just that cost/benefit should be carefully considered. They weren’t just a blanket, one size fits all answer because one is a homeowner. Your home is pretty well protected already as is your retirement accounts. The choice of coverage should be based on what other assets one might have that might be vulnerable.I added the frequently overlooked aspect that they increase one’s target size in the tort claims arena. One should not add to that unnecessarily.

Is there a limit to the number (I heard is four) of rental property under an umbrella policy?

From what I have been told, up to 4 is included in the original fees. But starting from 5th, your premium will be different.

No limit to number of properties.

Thanks, myo and mranch.

What about LLC? Anyone incorporate a LLC to hold the rental property?

Only advantage of LLC is to limit legal exposure. So you would need to divide up your properties into small chunks and hold them in a number of LLCs. Some people go to the logic extreme of holding each property in its own separate LLC.

But you can’t get normal cheap mortgage with LLC. You’d have to go commercial I believe. Actually Blackstone requires properties be held in LLC if you borrow money from them.

Well, not Geico at least with me. They explained to me that my 4 plex is considered 4 separate units or properties subject to exposure. Up until the time of buying the Fremont SFH, I was fine with the primary and 4 plex under the umbrella. When I tried to add the Fremont place, Geico balked and said I passed the limit and would need to go LLC or something to that effect. When I told them I was not prepared to do so and would move the entire business they made the exception to allow me to keep all 6 under there for at least another year. @manch, let me know if your carrier actually has no limit (since I am assuming you have all of your condo properties under the one umbrella).

I am past 4 and my agent didn’t complain. I am with State Farm.

Yes, if you are going to obtain financing in the name of the LLC this is going to be difficult and more expensive. What most people do is hold the deed in the name of the LLC but finance it in their own name. Not that I have done it, just learnt that from the biggerpockets thread discussing about llc vs umbrella in detail:

Not sure if banks are cool with deed names completely different from mortgage names. There is a lot of debate of umbrella insurance vs LLCs. In the end I land on having insurance to cover my butt and not bother with LLCs.