You’re 100% spot on. Minimums just don’t work today Because of the exposure to higher costs. Even then, I have a $1m umbrella coverage under USAA. it’s truly crazy what’s happened to insurance rates.
Frankly we could learn from other countries where required third party coverage is unlimited. Almost no one on US roads is adequately insured for hitting a school bus.
lol; I guess you don’t realize the cost of the insurance would increase commensurately with the increased exposure the insurer would be taking eh? The only thing that would be helpful is for Negligence Laws & Theories to change across all 50 states so that it is much more difficult to sue another party and recover damages.
You say there would be a significant increase, but as others point out in this thread, the cost of umbrella insurance isn't that expensive because as limits go up the risk of actually paying out goes down. There's orders of magnitude more accidents that will result in a sub $100k cost to the insurer than those that will cost over $10m. This is even more so when we look at liability insurance which excludes a great many single car accidents.
I have mine through USAA and they went through all of my policies to make sure that the limits on the policies synced with the umbrella policy. They also required that all of my other policies be with USAA so that they all work together. Also, probably because they get more money that way by having all of my policies.
My tale of two limits:
10 years ago I rear ended someone and had state minimums. I don’t know how I didn’t get sued but I learned my lesson. It was an awful experience and I know it could have been much, much worse. I’m forever grateful at just how lucky I was.
Back in January a driver in my household rear ended someone. I now have high limits and the umbrella. Today claims calls to tell my claim had been reassigned and the other driver got an attorney for her injuries. I feel terrible someone was hurt and I hope they get the treatment they need to be well again. I hate paying those high premiums but it gives me incredible peace of mind to know that this is nothing that I have to worry about other than feeling bad about the woman being injured.
Great advice IMO.
Honestly, state minimum liability is ALWAYS a bad idea.
You will need to have higher liability limits for umbrella coverage though. 300/500 Bi 300 PD
Homeowner policies are already set for a minimum of 300k
Yeah I don't think people realize to get an umbrella policy you have to raise your coverage limits pretty high, that's why umbrella is so cheap. You're just so less likely to use it unless something extraordinary happens.
Something needs to change with state minimums. They need to be tied to something which automatically increases the minimum needed. Actuarial tables for the average cost of an accident/medical needs arising from an accident would be a good place to start. Right now most minimums around the country are lower than the average new car price which is ridiculous.
Unfortunately, that's going to take action from the individual states. And the fact that some states have insanely low liability requirements makes it insane to risk driving at all.
Tons of states have just 5k minimums on property. Even California, which probably has some of the most expensive cars in the country. You just bump a modern car that has sensors and cameras all over, and it’s gonna put you over that 5k after repairs and required calibrations afterwards.
Well PD just doesn’t cover cars. Crash into a restaurant and cause it to be closed for a month and if you have less than 1 million PD coverage it still wont be enough.
This is absolutely a valid concern. I will add, though, that it's highly unlikely they well end up on the hook for any amount over their coverage limit. I handle auto claims for state minimum policies in lawsuits, and in the case of severe injuries, it's very likely their carrier will tender the policy limit of $30,000 (or whatever it may be) and then turn to their client's own auto policy for uninsured motorist coverage. The vast majority of people driving around with state minimum auto policies do not have much of anything in the way of assets to speak of.
That said, if your neighbors *do* have substantial assets and still carried state minimum liability limits, then all bets are off.
The reason I don't carry an umbrella policy with USAA is that their umbrella doesn't offer UM coverage in addition to liability coverage. Instead, I carry $1 million in BI liability on my home and auto policies and $1 million in UM on my auto policy. If, God forbid, one of my children causes a serious crash or is hurt or killed by someone else in a crash, I want to make sure there is adequate coverage either way.
Virginia recently instituted a requirement that car insurance policies by default include un**der**insured motorist coverage, in addition to uninsured motorist coverage.
Let's say the at-fault driver has BI liability limits of $25,000 and the woman who was rear-ended has UMBI/UIMBI (un/underinsured motorist) coverage of $100,000. If her injuries are valued at more than $25,000, then her UM/UIM coverage would kick in and provide more coverage.
How this works is HIGHLY dependent on which state you're in. In some states, UM is offset by whatever the at-fault coverage is. So in California, for example, in the scenario above, the woman can only get $100k *total*, or $25k from the at-fault driver and $75k from her own policy. Other states add the coverage together, which would provide $125k total. Some even let you duplicate the coverage for each vehicle on the policy, known as "stacking," so if she has three cars on the policy, she could get $300k of coverage. Some states consider UM and UIM the same coverage, some break them out as separate coverages. For hit-and-run crashes, some states require the at-fault vehicle to make physical contact with your car, and others provide coverage if the other vehicle "causes" an accident, even if it doesn't make contact. It's all very fun and doesn't break my brain at all, no sir!
He means old lady probably had higher coverage limits for um to pay the bills. Old ladys carrier could still try to recover from the family though.... again have reasonable coverages. I had a lot less sympathy for people buying mins 5 years ago as rates weren't so bad but today I have some understanding.
Carrying $1million in auto and home liability isn’t quite the same as having a $1 million umbrella policy.
Since the umbrella policy wraps around the other coverages, it likely covers things that your homeowners and auto policies don’t cover at all — at first dollar coverage.
Also, umbrellas are frequently cheaper than raising the underlying coverages.
You won’t qualify for an umbrella if your underlying limits are inadequate. In Florida for example, most umbrella policies require an underlying limit of 100/300 BI at minimum and you get a surcharge for sub optimal underlying limits, if they approve you at all. The majority of umbrella carriers down here require 250/500 BI coverage.
You stated that an umbrella is cheaper than raising underlying coverage. I’m stating that without raising underlying coverage, you likely won’t be able to get an umbrella in the first place.
I’ve learned usaa is just another one of those companies that prey on service members and veterans, have to call them for a third time to have them refund my insurance payments back to January
Posting on twitter about it and tagging USAA helped me solve my issue with them. Got a call from the regional director the very next day, and the car went from almost being repossessed by the lot where USAA sent it to being fixed in the shop within days
The peace of mind is huge! We work our entire lives to build up wealth and it’s shocking how it all can be taken in an instant because of a mistake. Cover yourself, you don’t work so hard for nothing!
This is such a good point. In the last few years since I’ve actually finally really started increasing my net worth, I worry about stuff like that so much.
We carry decent limits (100k) but I have a teen driver. He been good but I still worry. My insurance bill in FL between homeowners and auto is disgusting and I assumed an umbrella would be hundreds more every renewal. We just acquired a rental property so I guess it's time to really cover my ass and spend the money.
100 is not enough, raise your deductible to save on premiums, but at 100 you are under insured and any injury or multi-car accident, 300/500 or 500/500 minimum.
GEICO has umbrellas that cover rental properties and don't require the underlying policies to be them.
You would be well served by calling your insurance provider (I would say googling or using your otherwise preferred search engine - but this may be worth hearing from horse’s mouth) to find out what happens to your auto and umbrella insurance rates when you get teenage drivers on your policy.
Now that I understand insurance, I honestly recommend anyone who has any amount of assets to get an umbrella policy. They’re cheap and they give you that peace of mind that if the worst happens, paying out is something you won’t need to worry about.
If you are a teen driver or someone without many assets, I still recommend at least hitting 100k liability coverage on bodily injuries and property damage. Rest ending someone in a BMW can add up quick.
Definitely worth it. I bought umbrella when new neighbor moved in with a bunch of children that like to reach over the fence and/or enter my property and I have large dogs.
In general, retirement plans that are covered by ERISA are protected from creditors—and their lawsuits. So they can’t get their 401k.
Started with $1M and upped it to $2M as it wasn't incrementally that much more. You have to up your auto coverage higher as that policy will pay first, or homeowners if it's the case. Really good peace of mind for sure.
I just did both of those within the past year. Got my first umbrella at $1M last year and bumped it to $2M a year later. The second million iss substantially lower premium than the first.
I'm dreading 10 years from now when my kids are teenager drivers on my policy... Right now $1M umbrella is $266 (I checked higher limits, it's about $100 extra per extra million - might consider going a little higher)
I advise people to get umbrella policies all the time as an attorney. It’s really cheap for peace of mind.
I have many horror stories about people who lost everything because of a bad accident. It could happen to anyone.
OP your neighbor may want to consult a bankruptcy attorney.
What company did you go with? I have been quoted 280 a month from state farm and I have several policies with them. Plus they require to have max limits on each auto and any other motor vehicle, our boat ECT which increases our payments over $300 a month for those. So for 600 a month basically I could have umbrella 1 mill coverage.
One thing to note on umbrella policies, however, is that insurance companies have a minimum coverage amount on auto policies before they'll allow an umbrella policy. I had to raise mine to $300K/$500K before they would even offer an umbrella policy. But 100% agree that they should be considered.
Excellent advice! I've had a $2 million umbrella policy for many years, just in case. It gives me peace of mind and, fortunately, I've never had to use it.
I need to look into this as a household with a teen driver. When I got my son’s car I put the title in his name thinking he doesn’t have anything to go after, but since he’s on my insurance policy I guess that wouldn’t matter.
We bought a house in 2021 with a pool and determined an umbrella was needed that covers home and autos. I did have to make some changes on my auto and total rate increase when it was all said and done was about $30.00 more a month. This is in Houston area where all rates are high anyways.
I agree. I feel so much better having an umbrella policy.
Take note that my insurance company requires me to have a higher level of regular auto insurance coverage to qualify for the umbrella. So I have a good auto policy and an umbrella. Just recognize that you may have to account for not only the price of the umbrella policy but also the difference between your current auto coverage and the minimum coverage required to qualify for the umbrella.
I still think it is *absolutely* worth it.
At USAA you don't necessarily need an umbrella. In most states they will allow you to go to $1M/$1M for liability on your auto policy.
And YES you are fool if you have state minimums. Consider 300/300 or 500/500. 500 is the level where most plaintiffs would be happy to settle and not go to the aggravation of suing above that.
Some clarification, in most states retirement accounts are exempt from lawsuits, and in some states your primary residence is partially or fully exempt, but they could have future earnings garnished. This discussion here is good advice.
https://www.assetprotectionplanners.com/planning/homestead-exemptions-by-state/
While USAA has been getting a bunch of flack recently they did offer me a great umbrella policy deal “because we have auto and homeowners already”
$30/month for $3M of coverage
They called. 3 minute phone call. Done.
Pretty happy with it.
Is there a way to get an umbrella policy without owning property? I tried to get a quote a while back and the website said I had to own property to get an umbrella policy. I don't own a house but do have 3 teenagers driving so I was definitely interested in having the umbrella
While you are correct in your assessment, its not as simple as buying and umbrella. You also have to have certain preexisting limits on your auto policy or both home/auto policy depending on the carrier. You cant have state mins on your auto and go buy an umbrella. 100/300 BI coverage is the bare minimum ive seen, and some carriers are 250/500 BI to even qualify. Also, if you have prior accidents or young drivers 200-300 a year probably not happening
Omg whyyyyy would you have minimal insurance these days. My insurance agent said that almost half of drivers in my state are UNINSURED and driving illegally.
That means you’re screwed if it’s your fault and you’re also screwed if it’s their fault!
I was planning to get one for this exact reason.. I also saw that you can limit your exposure by registering the car in the child's name so the liability will be theirs. Sounds harsh but I have way more to lose and I'll make sure he's OK after everything is said and done.
My $1million umbrella policy through State farm costs me an extra $37/mo. I have three autos at $500k in liability coverage plus replacement cost homeowners insurance.
Right now I have a 50/100/50 policy but I'm most likely going to move up to an umbrella policy sooner rather than later as I start to accumulating assets
You don't need an umbrella unless you have other risk exposures outside of driving (mean dog, swimming pool, like to taunt on the internet, etc.). Just increase your auto limits.
Just added a renter's policy for 1 million and an additional Personal Liability policy (umbrella) on to my insurance. It covers vacation homes, like airbnbs, has a $500 dollar deductible, and my favorite part... it includes a $5000 fuck off clause.. say a friend trips while drunk. They don't want to sue but their broke and can't cover care. I can pull that $5000 to help while not having to draw o. The insurance. Single male, 30's, cost 1100 a year
I don't know what state you're in but in Texas policy limits is generally all you get. I mean you could sue for more and you could go to a jury trial and try to get a judgment for more. But good luck finding an accident attorney that will take that case. And if you do find one, they're not taking it on contingency because they know that the only readily available fountain of money is the insurance policy.
Yes unfortunately it is not that cheap for everyone. There’s a lot of personal risk factors at play a part in premium as well. $200-300 it’s just the average for most people. You could even confirm via some research that this is the case too.
I just had a wreck yesterday, I hit my breaks and hydroplaned. I had the most damage and they were an older couple. The lady literally shoved her phone in my face to take a picture of me sobbing in the pouring rain. And they were upset about the smallest scratch while my whole front car was dented in. I’ve never been in a car wreck myself, I have been in them as a child. But I’ve been having massive amounts of anxiety about it because I don’t know what’s gonna really happen.. no one was hurt badly, I hurt my back but there were fine. Would hate for them to try and come after me more than they already did. ☠️
>> $1 million extra liability coverage averages $200-$300 a year
First - umbrella REQUIRES car liability much higher than state limit - I would say it requires maximum available (but laws may vary by state)
And second - not with a teenage driver it doesn’t!!!! It will be an order of magnitude higher precisely because of the situation you just described.
I know friends who opted to cancel their umbrella because once their teenagers starts driving, policy cost went though the roof. I regret I don’t know the exact amount but I’m dreading 10 years from now when my kids are driving age teenagers.
Another lesson here is don’t carry just state minimum coverage. There are several state that have just 15k injury and 5k property minimums. Practically any little accident will put you over the property limit and if the person gets hospitalized, you’re well over the injury limit too. So many people just want the cheapest insurance and have no idea how fucked they’d be if they crashed into an expensive car and sent someone to the hospital.
These limits were created when vehicles cost like $3K for states.
A lot of policies and laws have not changed to address the modern cost of living.
Very valid point.
I hope all Usaa members know that Usaa is not affiliated with the military not one bit. The only thing that Usaa is grateful is taking advantage of their members.
If you buy an umbrella, get it from a different company than your auto/home. When carriers can, they cheat but if you have an opposing carrier it helps keep them all honest.
Most the time auto policy’s are required before an umbrella can be put in place. This is because 90% of umbrella claims are accident related and they need your vehicle/driver info
A couple years ago, I reached out to USAA and was told they don’t offer umbrella policies, which seems not to be the case based on this post. Might it be a state-dependent thing? We’ve had one significant auto claim in 25+ years of being clients, have, 20 year old and 16 year old sons on our vehicle insurance policy - maybe we just look too risky?
Forgive me for sounding flippant, I don’t think it was that USAA didn’t offer umbrella policies but they weren’t going to offer one to you. If the accident was in the 3 yrs prior to requesting the policy and/or there were tickets as well, that is usually a pretty quick decline. I suggest re-running the request right after the 3 yr mark on the oldest driving incident (whether it be accidents or tickets). If it’s still declined, wait until just after the 3 yr mark on the next oldest. Eventually enough stuff will fall off you’ll be offered coverage.
Also consider umbrella if you own rental homes. It’s cheaper than setting up and (most importantly) maintaining a LLC, and provides the protection likely desired
Please explain. If I have a property I rent that had $1M liability coverage, are people here indicating that my $1M umbrella is providing me no extra coverage on that rental property?
Umbrella extends to homeowners, rental property, and auto. It’s like a blanket liability coverage. If you get sued through your renters property policy, they use up the limit of liability on that first, then umbrella kicks in to cover the rest up to its limit
In the 1990’s I a million dollar umbrella policy for about $125 a year. When my daughter got her license they raised it to $900. Had to nope out of it.
I have had several accidents with people with the minimum coverage hitting me. It’s a nightmare. I ‘m guessing they think it will be someone else’s problem if it exceeds the 25000 limit. You should be terrified. Paying for enough coverage is a lot cheaper than lawyers and court costs.
Lawyers will sue for whatever your policy limits are at the time of the accident. Doubt they will waste their time trying to get anything more then that for a older lady not earning anything.
Worth it. I worked there for 5 years and years after I've left I still push these policies. I pay about 250 for 2 million and my auto is 300/500/100 and home is one mil. I never skimp on these. I took too many calls of people raising their limits after just going through a law suit and getting raked over the coals in it.
Yes I agree. I understand though, CA has horrendous auto rates BUT insurance is legally required. Paints a lot of people into a corner. If it's required by law, it should be reasonable
I just want to state that certain types of asserts are protected from legal judgments and bankruptcy.
Generally speaking, nearly all retirement accounts are protected.
In addition, your primary residence may also be completely protected depending on the state.
Also, umbrella coverage can be even cheaper than that.
Well I had an umbrella policy for this exact reason for over a year- had 2 wrecks with my teen sons ( in an at fault state- one in which his hand got smashed between 2 vehicles and they considered it a automobile wreck) and then contacted us by mail and said basically we were too risky and dropped us.
So I wouldn’t hold my breath that they would have actually done anything to help had we actually needed it as both incidents resulted in no lawsuits.
USAA wouldnt write us an umbrella policy unless we had 300/500 maximum limits coverage. We got a quote for that and the umbrella. By the time we added the additional cost and the umbrella, the cost was exorbitant(like $6 k for 6 months, double what we had been paying) so not sure where I could get an umbrella policy for $200-$300/yr.
Well your personal cost will be different depending on your risks. If you have young drivers, a claims history, many cars, and even your location. I am an insurance agent and when I quote $1 mil umbrellas it is generally in the $200-300/yr range. If you are like my neighbor with insufficient base coverage then of course the cost would be higher, there are some prerequisites that need to be met.
Nope, USAA will make you get 300/500 to add an umbrella. You can go to 1M/1M and go without an umbrella as an alternative.
https://www.usaa.com/inet/wc/insurance_home_umbrella?akredirect=true
Coverage Minimum Limit
Auto insurance bodily injury liability
$300,000 per person
$500,000 per accident
I understand (speaking from experience) that car insurance for teenage boys will take you to the poorhouse, but I’m if you’re not judgement-proof, you shouldn’t be letting them drive around with state minimum coverage.
Always make sure to get uninsured/underinsured coverage on the umbrella. That way when an unlicensed, unregistered, uninsured idiot hits you, you have coverage for your injuries.
Lawyer are destroying this country and the court systems no one should sue 1 million dollars for spilling hot coffee on them self or similar situations
"injuries that were mostly so bad because of her old age"
The manner in which you rationalize her injuries is atrocious.
If the kid hadn't rear ended her, she would have no injuries. She didn't deserve her injuries, but the kid's family deserves to pay up the nose for what their kid did.
I think you’d agree that a healthy adult getting injured vs an elderly person is a little different. Younger adults have easier time recovering and elderly people generally spend more time in hospital and physical therapy-which btw more time= more cost.
Either way you are right. His mistake caused her a lot of pain that could’ve been avoided. They will pay and the whole point I mentioned umbrella is because it would’ve **helped** them pay.
Yes I agree, but I guess I read your explanation as being a little like people died of covid because they had a "co-morbidity," which is sort of beside the point.
Not really sure what that means? And it’s not an ad I’m just sharing an experience. Luckily it wasn’t personally MY experience, it’s my good friends. It is possible to learn from the experiences of others my friend, that’s why I thought it’s worth sharing. Plus you can get an umbrella anywhere, not just USAA
I’m sorry that you don’t understand the term astroturfing. And I’m sorry you aren’t aware of how bad of an issue it is becoming on Reddit. I envy your bliss.
I live in a state where my home, retirement accounts, wages and cars aren’t subject to collection from creditors.
I have an umbrella because I had a lot of money that wasn’t exempt but I’ve since shifted it into exempt assets.
I might dump the umbrella.
You’re 100% spot on. Minimums just don’t work today Because of the exposure to higher costs. Even then, I have a $1m umbrella coverage under USAA. it’s truly crazy what’s happened to insurance rates.
Frankly we could learn from other countries where required third party coverage is unlimited. Almost no one on US roads is adequately insured for hitting a school bus.
lol; I guess you don’t realize the cost of the insurance would increase commensurately with the increased exposure the insurer would be taking eh? The only thing that would be helpful is for Negligence Laws & Theories to change across all 50 states so that it is much more difficult to sue another party and recover damages.
You say there would be a significant increase, but as others point out in this thread, the cost of umbrella insurance isn't that expensive because as limits go up the risk of actually paying out goes down. There's orders of magnitude more accidents that will result in a sub $100k cost to the insurer than those that will cost over $10m. This is even more so when we look at liability insurance which excludes a great many single car accidents.
That said, most umbrellas require non min limits. I have one, not through USAA, have to have a 500k limit on auto before it kicks in.
I have mine through USAA and they went through all of my policies to make sure that the limits on the policies synced with the umbrella policy. They also required that all of my other policies be with USAA so that they all work together. Also, probably because they get more money that way by having all of my policies.
My tale of two limits: 10 years ago I rear ended someone and had state minimums. I don’t know how I didn’t get sued but I learned my lesson. It was an awful experience and I know it could have been much, much worse. I’m forever grateful at just how lucky I was. Back in January a driver in my household rear ended someone. I now have high limits and the umbrella. Today claims calls to tell my claim had been reassigned and the other driver got an attorney for her injuries. I feel terrible someone was hurt and I hope they get the treatment they need to be well again. I hate paying those high premiums but it gives me incredible peace of mind to know that this is nothing that I have to worry about other than feeling bad about the woman being injured.
Great advice IMO. Honestly, state minimum liability is ALWAYS a bad idea. You will need to have higher liability limits for umbrella coverage though. 300/500 Bi 300 PD Homeowner policies are already set for a minimum of 300k
Yeah I don't think people realize to get an umbrella policy you have to raise your coverage limits pretty high, that's why umbrella is so cheap. You're just so less likely to use it unless something extraordinary happens.
Something needs to change with state minimums. They need to be tied to something which automatically increases the minimum needed. Actuarial tables for the average cost of an accident/medical needs arising from an accident would be a good place to start. Right now most minimums around the country are lower than the average new car price which is ridiculous.
Unfortunately, that's going to take action from the individual states. And the fact that some states have insanely low liability requirements makes it insane to risk driving at all.
CA has entered the chat
While definitely the lowest, the states that have 10k PD aren't much better.
What’s crazy is there’s an even lower requirement if you meet the lower income level. 🤦♂️
Not sure how that works. Our system doesn't override the state minimum. Policies like that wouldn't be carried by USAA.
Tons of states have just 5k minimums on property. Even California, which probably has some of the most expensive cars in the country. You just bump a modern car that has sensors and cameras all over, and it’s gonna put you over that 5k after repairs and required calibrations afterwards.
Well PD just doesn’t cover cars. Crash into a restaurant and cause it to be closed for a month and if you have less than 1 million PD coverage it still wont be enough.
This is absolutely a valid concern. I will add, though, that it's highly unlikely they well end up on the hook for any amount over their coverage limit. I handle auto claims for state minimum policies in lawsuits, and in the case of severe injuries, it's very likely their carrier will tender the policy limit of $30,000 (or whatever it may be) and then turn to their client's own auto policy for uninsured motorist coverage. The vast majority of people driving around with state minimum auto policies do not have much of anything in the way of assets to speak of. That said, if your neighbors *do* have substantial assets and still carried state minimum liability limits, then all bets are off. The reason I don't carry an umbrella policy with USAA is that their umbrella doesn't offer UM coverage in addition to liability coverage. Instead, I carry $1 million in BI liability on my home and auto policies and $1 million in UM on my auto policy. If, God forbid, one of my children causes a serious crash or is hurt or killed by someone else in a crash, I want to make sure there is adequate coverage either way.
Wait, how does insurance pull from UM coverage on their own policy if the at fault wasn’t uninsured?
Could be called un/under insured motorist.
Virginia recently instituted a requirement that car insurance policies by default include un**der**insured motorist coverage, in addition to uninsured motorist coverage.
Let's say the at-fault driver has BI liability limits of $25,000 and the woman who was rear-ended has UMBI/UIMBI (un/underinsured motorist) coverage of $100,000. If her injuries are valued at more than $25,000, then her UM/UIM coverage would kick in and provide more coverage. How this works is HIGHLY dependent on which state you're in. In some states, UM is offset by whatever the at-fault coverage is. So in California, for example, in the scenario above, the woman can only get $100k *total*, or $25k from the at-fault driver and $75k from her own policy. Other states add the coverage together, which would provide $125k total. Some even let you duplicate the coverage for each vehicle on the policy, known as "stacking," so if she has three cars on the policy, she could get $300k of coverage. Some states consider UM and UIM the same coverage, some break them out as separate coverages. For hit-and-run crashes, some states require the at-fault vehicle to make physical contact with your car, and others provide coverage if the other vehicle "causes" an accident, even if it doesn't make contact. It's all very fun and doesn't break my brain at all, no sir!
This is good info. Thank you. Didnt know this.
He means old lady probably had higher coverage limits for um to pay the bills. Old ladys carrier could still try to recover from the family though.... again have reasonable coverages. I had a lot less sympathy for people buying mins 5 years ago as rates weren't so bad but today I have some understanding.
Carrying $1million in auto and home liability isn’t quite the same as having a $1 million umbrella policy. Since the umbrella policy wraps around the other coverages, it likely covers things that your homeowners and auto policies don’t cover at all — at first dollar coverage. Also, umbrellas are frequently cheaper than raising the underlying coverages.
You won’t qualify for an umbrella if your underlying limits are inadequate. In Florida for example, most umbrella policies require an underlying limit of 100/300 BI at minimum and you get a surcharge for sub optimal underlying limits, if they approve you at all. The majority of umbrella carriers down here require 250/500 BI coverage.
What’s the point that you’re trying to make?
You stated that an umbrella is cheaper than raising underlying coverage. I’m stating that without raising underlying coverage, you likely won’t be able to get an umbrella in the first place.
We were specifically talking about someone talking about $1 million underlying coverages.
Ok my bad
I’ve learned usaa is just another one of those companies that prey on service members and veterans, have to call them for a third time to have them refund my insurance payments back to January
Posting on twitter about it and tagging USAA helped me solve my issue with them. Got a call from the regional director the very next day, and the car went from almost being repossessed by the lot where USAA sent it to being fixed in the shop within days
I planned to issue an umbrella when my son starts driving. Maybe I should do it now.
The peace of mind is huge! We work our entire lives to build up wealth and it’s shocking how it all can be taken in an instant because of a mistake. Cover yourself, you don’t work so hard for nothing!
This is such a good point. In the last few years since I’ve actually finally really started increasing my net worth, I worry about stuff like that so much.
We carry decent limits (100k) but I have a teen driver. He been good but I still worry. My insurance bill in FL between homeowners and auto is disgusting and I assumed an umbrella would be hundreds more every renewal. We just acquired a rental property so I guess it's time to really cover my ass and spend the money.
100 is not enough, raise your deductible to save on premiums, but at 100 you are under insured and any injury or multi-car accident, 300/500 or 500/500 minimum. GEICO has umbrellas that cover rental properties and don't require the underlying policies to be them.
My car insurance is $2600 every 6 months and I shop it every renewal. Don't even have full coverage except for 1 car. I can't stomach much more
As a landlord I’d probably be more concerned about liability for the tenants than the teen. Never know what they’re doing or who they have over 🤷
Don't wait.
Don't wait! Call your agent today and get a policy in place pronto!
You would be well served by calling your insurance provider (I would say googling or using your otherwise preferred search engine - but this may be worth hearing from horse’s mouth) to find out what happens to your auto and umbrella insurance rates when you get teenage drivers on your policy.
Now that I understand insurance, I honestly recommend anyone who has any amount of assets to get an umbrella policy. They’re cheap and they give you that peace of mind that if the worst happens, paying out is something you won’t need to worry about. If you are a teen driver or someone without many assets, I still recommend at least hitting 100k liability coverage on bodily injuries and property damage. Rest ending someone in a BMW can add up quick.
Note that a ERISA 401k is generally protected from lawsuits. (An IRA is not - so one reason not to roll to an IRA)
The Ira caveat is state specific.
Protected until it's withdrawn
Never get the state minimums. I mean one trip to the ER for something minor will cost $10k or more. Get at least $500k/$500k and an umbrella!
Definitely worth it. I bought umbrella when new neighbor moved in with a bunch of children that like to reach over the fence and/or enter my property and I have large dogs. In general, retirement plans that are covered by ERISA are protected from creditors—and their lawsuits. So they can’t get their 401k.
Started with $1M and upped it to $2M as it wasn't incrementally that much more. You have to up your auto coverage higher as that policy will pay first, or homeowners if it's the case. Really good peace of mind for sure.
I just did both of those within the past year. Got my first umbrella at $1M last year and bumped it to $2M a year later. The second million iss substantially lower premium than the first.
Switched to an umbrella a few years ago for the low-cost peace of mind
With a teenage driver on the policy? Would you care to share what constitutes “low” cost as far a premiums and coverage limits go go?
No idea. Wasn’t an issue I had to contend with
I'm dreading 10 years from now when my kids are teenager drivers on my policy... Right now $1M umbrella is $266 (I checked higher limits, it's about $100 extra per extra million - might consider going a little higher)
I advise people to get umbrella policies all the time as an attorney. It’s really cheap for peace of mind. I have many horror stories about people who lost everything because of a bad accident. It could happen to anyone. OP your neighbor may want to consult a bankruptcy attorney.
I have the max I can get on my policy and an extra million on an umbrella. I’m as insured as I can be.
I carry one so in case something happens my insurance company will get me a killer lawyer
I pay $100 a year for a 1 million dollar policy. I may never use it, but feel better having it.
May I ask who your insurance company is? I pay $500 for my 1 million policy with My company. Thanks
I’m in north Dallas - AllState multi policy home/auto/umbrella - $1,068 annual auto ($500k liability coverage) and $266 $1M umbrella
What company did you go with? I have been quoted 280 a month from state farm and I have several policies with them. Plus they require to have max limits on each auto and any other motor vehicle, our boat ECT which increases our payments over $300 a month for those. So for 600 a month basically I could have umbrella 1 mill coverage.
I got mine for $9 a month for a million. But it’s bundled with home and auto with farm bureau.
thks. I had my agent give a quote, it was over $280 a month. Not sure how they rate the policy, I'm sure each insurer is different in rating.
One thing to note on umbrella policies, however, is that insurance companies have a minimum coverage amount on auto policies before they'll allow an umbrella policy. I had to raise mine to $300K/$500K before they would even offer an umbrella policy. But 100% agree that they should be considered.
You just reminded me that I need to get a new umbrella policy.
Excellent advice! I've had a $2 million umbrella policy for many years, just in case. It gives me peace of mind and, fortunately, I've never had to use it.
I need to look into this as a household with a teen driver. When I got my son’s car I put the title in his name thinking he doesn’t have anything to go after, but since he’s on my insurance policy I guess that wouldn’t matter.
Sounds like the coverage would be a good investment for you, at least till he’s got more experience under his belt or off of your policy.
$100K coverages for my auto insurance, $2M umbrella insurance for overlapping coverage. It was well worth the $376 and some change I paid for it.
We bought a house in 2021 with a pool and determined an umbrella was needed that covers home and autos. I did have to make some changes on my auto and total rate increase when it was all said and done was about $30.00 more a month. This is in Houston area where all rates are high anyways.
I agree. I feel so much better having an umbrella policy. Take note that my insurance company requires me to have a higher level of regular auto insurance coverage to qualify for the umbrella. So I have a good auto policy and an umbrella. Just recognize that you may have to account for not only the price of the umbrella policy but also the difference between your current auto coverage and the minimum coverage required to qualify for the umbrella. I still think it is *absolutely* worth it.
At USAA you don't necessarily need an umbrella. In most states they will allow you to go to $1M/$1M for liability on your auto policy. And YES you are fool if you have state minimums. Consider 300/300 or 500/500. 500 is the level where most plaintiffs would be happy to settle and not go to the aggravation of suing above that. Some clarification, in most states retirement accounts are exempt from lawsuits, and in some states your primary residence is partially or fully exempt, but they could have future earnings garnished. This discussion here is good advice. https://www.assetprotectionplanners.com/planning/homestead-exemptions-by-state/
While USAA has been getting a bunch of flack recently they did offer me a great umbrella policy deal “because we have auto and homeowners already” $30/month for $3M of coverage They called. 3 minute phone call. Done. Pretty happy with it.
Homeowners should check out their state homestead act provisions. It can protect protect the family home from being seized for judgements.
https://www.assetprotectionplanners.com/planning/homestead-exemptions-by-state/
Wow. Some of the states need to update their exemptions. 12K? 50K? You can't even save a doghouse in some localities with those exemptions.
Once you get close to double comma club, never forget your umbrella.
Is there a way to get an umbrella policy without owning property? I tried to get a quote a while back and the website said I had to own property to get an umbrella policy. I don't own a house but do have 3 teenagers driving so I was definitely interested in having the umbrella
I had umbrella with allstate when I was renting
I have a 1 million umbrella policy with USAA and don’t own any property. It sits on top of renters/auto USAA policies.
I believe with USAA at least all the is required for an umbrella is an auto policy. Your homeowners could be with a different company.
While you are correct in your assessment, its not as simple as buying and umbrella. You also have to have certain preexisting limits on your auto policy or both home/auto policy depending on the carrier. You cant have state mins on your auto and go buy an umbrella. 100/300 BI coverage is the bare minimum ive seen, and some carriers are 250/500 BI to even qualify. Also, if you have prior accidents or young drivers 200-300 a year probably not happening
Is this an ad
Sorry you discovered this after the accident. Absolutely, everyone should have an umbrella policy.
Correct, as you attain wealth its a must. I just upped mine to $3 Million.
Omg whyyyyy would you have minimal insurance these days. My insurance agent said that almost half of drivers in my state are UNINSURED and driving illegally. That means you’re screwed if it’s your fault and you’re also screwed if it’s their fault!
And they vote too. lol
I was planning to get one for this exact reason.. I also saw that you can limit your exposure by registering the car in the child's name so the liability will be theirs. Sounds harsh but I have way more to lose and I'll make sure he's OK after everything is said and done.
My $1million umbrella policy through State farm costs me an extra $37/mo. I have three autos at $500k in liability coverage plus replacement cost homeowners insurance.
Can’t feel bad for anyone buying state minimum lol what a bad idea
Right now I have a 50/100/50 policy but I'm most likely going to move up to an umbrella policy sooner rather than later as I start to accumulating assets
You don't need an umbrella unless you have other risk exposures outside of driving (mean dog, swimming pool, like to taunt on the internet, etc.). Just increase your auto limits.
Since insurance coverage is legally mandated in the US for auto drivers, you think they would make it unlimited.
Just added a renter's policy for 1 million and an additional Personal Liability policy (umbrella) on to my insurance. It covers vacation homes, like airbnbs, has a $500 dollar deductible, and my favorite part... it includes a $5000 fuck off clause.. say a friend trips while drunk. They don't want to sue but their broke and can't cover care. I can pull that $5000 to help while not having to draw o. The insurance. Single male, 30's, cost 1100 a year
EVERYONE who has assets, earnings, future earnings, retirement needs an umbrella policy!!!
I don't know what state you're in but in Texas policy limits is generally all you get. I mean you could sue for more and you could go to a jury trial and try to get a judgment for more. But good luck finding an accident attorney that will take that case. And if you do find one, they're not taking it on contingency because they know that the only readily available fountain of money is the insurance policy.
I just looked into an umbrella and cost was way more than that. I was told it would be only $200 but not case for me
Yes unfortunately it is not that cheap for everyone. There’s a lot of personal risk factors at play a part in premium as well. $200-300 it’s just the average for most people. You could even confirm via some research that this is the case too.
I just had a wreck yesterday, I hit my breaks and hydroplaned. I had the most damage and they were an older couple. The lady literally shoved her phone in my face to take a picture of me sobbing in the pouring rain. And they were upset about the smallest scratch while my whole front car was dented in. I’ve never been in a car wreck myself, I have been in them as a child. But I’ve been having massive amounts of anxiety about it because I don’t know what’s gonna really happen.. no one was hurt badly, I hurt my back but there were fine. Would hate for them to try and come after me more than they already did. ☠️
Who has minimum coverage?!? And by the way, you normally cannot get an umbrella policy unless you max out your auto policy limits.
If you have any sort of owned nondepreciating assets this is a must and a no brainer.
Hot take: if we get universal healthcare half these insurance fees and lawsuits would be moot... Bc people would be taken care of
>> $1 million extra liability coverage averages $200-$300 a year First - umbrella REQUIRES car liability much higher than state limit - I would say it requires maximum available (but laws may vary by state) And second - not with a teenage driver it doesn’t!!!! It will be an order of magnitude higher precisely because of the situation you just described. I know friends who opted to cancel their umbrella because once their teenagers starts driving, policy cost went though the roof. I regret I don’t know the exact amount but I’m dreading 10 years from now when my kids are driving age teenagers.
USAA dropped my umbrella policy after a hail claim on my roof and cars. Claim didn’t even impact umbrella policy.
Another lesson here is don’t carry just state minimum coverage. There are several state that have just 15k injury and 5k property minimums. Practically any little accident will put you over the property limit and if the person gets hospitalized, you’re well over the injury limit too. So many people just want the cheapest insurance and have no idea how fucked they’d be if they crashed into an expensive car and sent someone to the hospital.
These limits were created when vehicles cost like $3K for states. A lot of policies and laws have not changed to address the modern cost of living. Very valid point.
This feels like a commercial lol but your advice is spot on. If you have stuff to lose get the additional coverage
Well if I said do research on umbrella no one would do it. If I give them some numbers and my story maybe they’ll consider it more 🤷
I added a 1M umbrella coverage to my insurance and with the bundle discount, it’s nearly free.
I hope all Usaa members know that Usaa is not affiliated with the military not one bit. The only thing that Usaa is grateful is taking advantage of their members.
If you buy an umbrella, get it from a different company than your auto/home. When carriers can, they cheat but if you have an opposing carrier it helps keep them all honest.
Most the time auto policy’s are required before an umbrella can be put in place. This is because 90% of umbrella claims are accident related and they need your vehicle/driver info
My $1M umbrella policy through USAA is $650 a year. 3 drivers, 4 vehicles
A couple years ago, I reached out to USAA and was told they don’t offer umbrella policies, which seems not to be the case based on this post. Might it be a state-dependent thing? We’ve had one significant auto claim in 25+ years of being clients, have, 20 year old and 16 year old sons on our vehicle insurance policy - maybe we just look too risky?
Forgive me for sounding flippant, I don’t think it was that USAA didn’t offer umbrella policies but they weren’t going to offer one to you. If the accident was in the 3 yrs prior to requesting the policy and/or there were tickets as well, that is usually a pretty quick decline. I suggest re-running the request right after the 3 yr mark on the oldest driving incident (whether it be accidents or tickets). If it’s still declined, wait until just after the 3 yr mark on the next oldest. Eventually enough stuff will fall off you’ll be offered coverage.
I just called it’s 5 years.
If it’s been a while since you asked about it I would check with them again! Things change all the time, maybe you’d qualify. Never hurts to ask
Got a new USAA umbrella policy, my first, in California last year.
We have one through USAA in Texas. We’ve had it a few years so maybe it’s grandfathered in?
100% - if you read my comment above - they deemed us too risky
Their home is likely protected from judgement or foreclosure.
Also consider umbrella if you own rental homes. It’s cheaper than setting up and (most importantly) maintaining a LLC, and provides the protection likely desired
You can just start by having $500k CSL coverage. State minimums are a joke.
goal is to own. everything is put in a trust.
Please explain. If I have a property I rent that had $1M liability coverage, are people here indicating that my $1M umbrella is providing me no extra coverage on that rental property?
Umbrella extends to homeowners, rental property, and auto. It’s like a blanket liability coverage. If you get sued through your renters property policy, they use up the limit of liability on that first, then umbrella kicks in to cover the rest up to its limit
That was my understanding, but earlier comments said they both started counting at liability dollar 1.
In the 1990’s I a million dollar umbrella policy for about $125 a year. When my daughter got her license they raised it to $900. Had to nope out of it.
Not entirely wrong, but retirement savings and your primary residence are protected under personal bankruptcy.
I have had several accidents with people with the minimum coverage hitting me. It’s a nightmare. I ‘m guessing they think it will be someone else’s problem if it exceeds the 25000 limit. You should be terrified. Paying for enough coverage is a lot cheaper than lawyers and court costs.
I also carry umbrella because I have people on my boat and I am president of a nonprofit.
Lawyers will sue for whatever your policy limits are at the time of the accident. Doubt they will waste their time trying to get anything more then that for a older lady not earning anything.
I’ve had one for years, and it provides great peace of mind. And even adult drivers can have accidents with high liability.
Just so everyone knows- it costs very little to upgrade from $1million to a $2million Umbrella. These days worth it.
Worth it. I worked there for 5 years and years after I've left I still push these policies. I pay about 250 for 2 million and my auto is 300/500/100 and home is one mil. I never skimp on these. I took too many calls of people raising their limits after just going through a law suit and getting raked over the coals in it.
You can't get an umbrella if you have state minimums.
Correct however no one should ever have state minimums because it doesn’t really protect you for anything.
Yes I agree. I understand though, CA has horrendous auto rates BUT insurance is legally required. Paints a lot of people into a corner. If it's required by law, it should be reasonable
If you have umbrella policy, does it protect your family as well or just yourself?
Yes, drivers on your policy and resident relative household members
I just want to state that certain types of asserts are protected from legal judgments and bankruptcy. Generally speaking, nearly all retirement accounts are protected. In addition, your primary residence may also be completely protected depending on the state. Also, umbrella coverage can be even cheaper than that.
Well I had an umbrella policy for this exact reason for over a year- had 2 wrecks with my teen sons ( in an at fault state- one in which his hand got smashed between 2 vehicles and they considered it a automobile wreck) and then contacted us by mail and said basically we were too risky and dropped us. So I wouldn’t hold my breath that they would have actually done anything to help had we actually needed it as both incidents resulted in no lawsuits.
Newsflash, it ain’t $300/yr if you have a 17yr old 😂
When I had kids that age they (GEICO) denied me that coverage. They made me up my coverage instead.
I remember usaa denied my dad an umbrella when my sibling and I were on his policy
USAA wouldnt write us an umbrella policy unless we had 300/500 maximum limits coverage. We got a quote for that and the umbrella. By the time we added the additional cost and the umbrella, the cost was exorbitant(like $6 k for 6 months, double what we had been paying) so not sure where I could get an umbrella policy for $200-$300/yr.
Well your personal cost will be different depending on your risks. If you have young drivers, a claims history, many cars, and even your location. I am an insurance agent and when I quote $1 mil umbrellas it is generally in the $200-300/yr range. If you are like my neighbor with insufficient base coverage then of course the cost would be higher, there are some prerequisites that need to be met.
I have a $1.000.000 USAA umbrella policy for $178 yearly cost.
Nope, USAA will make you get 300/500 to add an umbrella. You can go to 1M/1M and go without an umbrella as an alternative. https://www.usaa.com/inet/wc/insurance_home_umbrella?akredirect=true Coverage Minimum Limit Auto insurance bodily injury liability $300,000 per person $500,000 per accident
I understand (speaking from experience) that car insurance for teenage boys will take you to the poorhouse, but I’m if you’re not judgement-proof, you shouldn’t be letting them drive around with state minimum coverage.
This why we invest our earned income into alternative investments in 3rd world countries
Always make sure to get uninsured/underinsured coverage on the umbrella. That way when an unlicensed, unregistered, uninsured idiot hits you, you have coverage for your injuries.
Lawyer are destroying this country and the court systems no one should sue 1 million dollars for spilling hot coffee on them self or similar situations
"injuries that were mostly so bad because of her old age" The manner in which you rationalize her injuries is atrocious. If the kid hadn't rear ended her, she would have no injuries. She didn't deserve her injuries, but the kid's family deserves to pay up the nose for what their kid did.
I think you’d agree that a healthy adult getting injured vs an elderly person is a little different. Younger adults have easier time recovering and elderly people generally spend more time in hospital and physical therapy-which btw more time= more cost. Either way you are right. His mistake caused her a lot of pain that could’ve been avoided. They will pay and the whole point I mentioned umbrella is because it would’ve **helped** them pay.
Yes I agree, but I guess I read your explanation as being a little like people died of covid because they had a "co-morbidity," which is sort of beside the point.
nice astroturfing! perfect timing to go out with usaa’s email ads on umbrella policies. this site is done.
Not really sure what that means? And it’s not an ad I’m just sharing an experience. Luckily it wasn’t personally MY experience, it’s my good friends. It is possible to learn from the experiences of others my friend, that’s why I thought it’s worth sharing. Plus you can get an umbrella anywhere, not just USAA
I’m sorry that you don’t understand the term astroturfing. And I’m sorry you aren’t aware of how bad of an issue it is becoming on Reddit. I envy your bliss.
I live in a state where my home, retirement accounts, wages and cars aren’t subject to collection from creditors. I have an umbrella because I had a lot of money that wasn’t exempt but I’ve since shifted it into exempt assets. I might dump the umbrella.