[USER]

We have uninsured/underinsured motorist coverage on our auto policy. There is an option to add excess coverage on our umbrella policy.

We are already retired (mid 50s), with about 1.5MM in investments.

Thoughts?

[Ron]

People say you should cover your net worth, but I had detailed discussions with my insurer about a year ago.

They never asked me about my liquid net worth, so I was never clear how that figured into it.

I’m retired and about 88% of my liquid net worth is in IRAs, with the other 12% on the taxable side.

I’m pretty sure that in my state IRAs have a lot of protection against involvement in a suit.

So, in any case all I’m telling you is that it’s not clear to me based on my experiences how your $1.5M liquid net worth figures into how much you should have in an umbrella policy.

In the end I upgraded to a $2M umbrella policy, even though my total liquid and RE net worth is less than $1M, essentially because umbrella insurance is insanely cheap for me, less than $200/year.

I don’t even own a car, but I felt it could provide some extra coverage were I to drive somebody else’s car.

I don’t have many indica/risks of liability, like an online presence, any type of motor vehicle, pool, car, trampoline, firearms, etc., etc. and I was thinking of dropping it, hence the discussion with my insurer.

It’s so cheap they probably figured that the likelihood of me ever exercising it is pretty miniscule.

If you have dependent, driving age children, rates go up a lot. My brother living in the same area with 3 dependent teenagers got a quote many multiples of what I am paying.

Good luck!!

[Becky]

I have it on ours now and I wish I had had it last year when my husband was t-boned and got a traumatic brain injury.

We will definitely max out our 250,000 with medical costs, immediate “loss of work” amounts and lawyer fees but it won’t cover the fact he lost contracts (we own a business) over it and may never recoup that income again.

Having that extra money to pull from would have been helpful.

[Bill]

Do you already have that coverage on your regular auto policy? You definitely want some coverage, but you don’t necessarily need to double up.

This is intended to cover the car and medical bills your normal insurance doesn’t cover, so it’s not an infinite number.

[Author]

Posts