How large an Umbrella liability policy needed?

[callbay]

At a get together the other night a couple of guys and I started to talk about umbrella policies.

One guy said his wife was involved in an accident that was her fault and the other person died. The insurance company just wrote out a check for the policy limit. 2 million.

The other guy said "figure out what you think you need and then double it".

How does one know what size umbrella to get?

 

[Alfred_B]

I have 2 million.

 

[Mr Nice]

What is your net worth ?

One million dollar policy should be adequate for most people.

 

[supton]

Originally Posted By: Mr Nice
What is your net worth ?

One million dollar policy should be adequate for most people.


One million is adequate in the sense it's more than their net worth; or one million is adequate in the sense it's 2x (or 4x, 10x, ___) their net worth?

 

[crazyoildude]

I have $750,000 plus a 2 million dollar umbrella policy which should be good.. Its not that much more for the extra million.
Im probably over insured but who knows you can get jammed up and get a run away jury..

 

[Carbon]

Would an umbrella policy make you more of a deep-pocket target?

http://www.usatoday.com/story/news/natio...llion/90205038/ What if somebody throws a hypodermic needle in your yard, and a woman gets stuck?

If you have a net worth of 0.5 million and a 2 million umbrella policy, now you are a $2.5 million deep pocket, right?

 

[supton]

Originally Posted By: Carbon
Would an umbrella policy make you more of a deep-pocket target?

http://www.usatoday.com/story/news/natio...llion/90205038/ What if somebody throws a hypodermic needle in your yard, and a woman gets stuck?

If you have a net worth of 0.5 million and a 2 million umbrella policy, now you are a $2.5 million deep pocket, right?


Sure, but a jury has to award that much for the offense. Plus the offending party has to somehow know about the umbrella policy, or they are just going to have to hope to target the right person.

In the case above I'd be surprised if Target didn't win an appeal--the award seems excessive.

 

[Al]

Originally Posted By: Carbon
Would an umbrella policy make you more of a deep-pocket target?
If you have a net worth of 0.5 million and a 2 million umbrella policy, now you are a $2.5 million deep pocket, right?

Except for one thing. The insurance co. will fight big time for you. Without that you can defend your .5 million by yourself...duuuhh.

 

[Alfred_B]

Originally Posted By: Al
Originally Posted By: Carbon
Would an umbrella policy make you more of a deep-pocket target?
If you have a net worth of 0.5 million and a 2 million umbrella policy, now you are a $2.5 million deep pocket, right?

Except for one thing. The insurance co. will fight big time for you. Without that you can defend your .5 million by yourself...duuuhh.




This. Outsource the fight to someone with much more muscle.

 

[demarpaint]

Originally Posted By: Carbon
Would an umbrella policy make you more of a deep-pocket target?

http://www.usatoday.com/story/news/natio...llion/90205038/ What if somebody throws a hypodermic needle in your yard, and a woman gets stuck?

If you have a net worth of 0.5 million and a 2 million umbrella policy, now you are a $2.5 million deep pocket, right?


Not really, they sue you for the limit of your policy then go after the .5 million, and garnish wages for the difference if any. It just depends on how much you get sued for and how much the person suing you gets awarded.

 

[Donald]

I would say between 1m and 2m would be fine

 

[901Memphis]

Whatever the state minimum is

 

[Ethan1]

The correct amount is the amount that lets you sleep at night. In all likelihood, you won't be subject to a major lawsuit. If you are, it's good for your insurance company to have major skin in the game so they mount a robust defense.

If someone successfully sues you for more than your 1M+ umbrella policy, you done goofed!

 

[Al]

Originally Posted By: 901Memphis
Whatever the state minimum is

One thing to keep in mind. If you get sued....And you are really guilty and are in the wrong.....the judgement against you can not be discharged (gotten rid of) even in bankruptcy. So you will be eternally paying off the judgement till it is paid...as you should.
Moral..you destroy someone else's life- they destroy yours.

Originally Posted By: Alfred_B

This. Outsource the fight to someone with much more muscle.

One of those rare times we agree..lol.

 

[crazyoildude]

It may but that is my insurance companies problem its on their dime.