Umbrella Insurance Explained

The price of insurance is skyrocketing. Many people are making the dangerous decision to under-insure or self-insure, and the consequences can be catastrophic to your finances. Clark explains who needs umbrella insurance and why some state minimums on auto insurance just aren’t enough.

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[heymoe]

USAA Umbrella policy saved me. A year from my retirement my daughter was involved in an accident while in college. Medical bills for all involved was well over $600k...without that additional insurance I would have lost my house and had to work another decade at least. Good advice Howard!

[glasshalffull]

An attorney friend of mine ran into the back of someone and it was a minor collision. Only problem is he ran into someone who had just had neck surgery. My friend was way underinsured and was sweating bullets for a few weeks until it was clear that the guy didn’t suffer any permanent damage.

[TheRalf]

Thanks …I had this when my teenagers were in my home …..now they have their own kids starting to drive…forward this to them❤

[LongFlowAdventures]

I wonder if being well-insured with something like an umbrella policy can actually attract lawsuits? I’d be shocked if personal injury attorneys and others can’t find info about your coverage limits, especially with discovery after they file a lawsuit. It seems like someone with a $1M umbrella policy might be a juicier target than someone with “regular” coverage.

I’m not suggesting people go without insurance, but is there a balance?

[RobWilliams]

All true but we need tort reform in this country but it won’t happen with all of the lawyers in Congress. I have $2mill on my umbrella insurance and it costs $650/yr. I live in CA. It’s worth it.

[treesnmoguls]

Slight correction: I believe Clark said that the umbrella amount is on top of other insurances (auto and home). Not EXACTLY. The Umbrella of $1 million (or $2 million, etc.) brings the total amount of liability to $1 million (you might be required to have $500, 000 auto/$200, 000 on your homeowners, for example, then WITH THE UMBRELLA, the total is $1 million, or $2 million, etc.).

[Burps___]

The issue is that umbrella insurance has caps, usually 5 million dollars. So, if your estate is worth more than that amount, including your salary which can be garnished, you are still left open for lawsuits.

[PatB]

Note: compare the limit verbiage in Umbrella policies. Using $1 Mil Umbrella either: $1 Mil in Excess of of your underlying limits OR it's the Difference Between your underlying limits & $1 Mil.

[MrGus.]

When does an umbrella policy stop being protection and become "big settlement lawyer bait"?

[cns]

Do we need to protect our 401K money or is it safe from lawsuits? IRA money varies from state to state as far as protection and if your house is in a personal asset trust you are supposed to be protected from lawsuits. Clark has mentioned before to play it safe and account for all of that.

[Anthony-zwqb]

$350 to save your future. Worth it to me

[Gumby]

I have had and umbrella policy for 20 years

[tincanboat]

I'm a firm believer in umbrella insurance. I'm always loosing my umbrella.

[SmartGuyChill]

Prices vary a lot per state. Umbrella in Georgia can increase uninsured/underinsured limits in case someone hits you without enough insurance. Every motorcyclist needs an umbrella policy. Lots of idiots out there without enough or no insurance. Even Clark seems to be uniformed about it. Talk to a licensed insurance agent for more info and to get.your facts correct.

[christ]

Yes, the $1M umbrella insurance policy itself is not that expensive. However, umbrella policies require you to increase car and home insurance policies to maximum coverages as well (e.g. the standard 100K/300K auto is required to increase to 250K/500K). By the time you factor in all those premium increases, the umbrella will cost you in excess of $1000/year. I still think it's in your best interest to do the umbrella if your assets are significant but it's misleading to say it's only a few hundred dollars.

[kaohsiung]

The main benefit of the Umbrella policy is that the insurance company's lawyers will get involved... because they are trying to save the COMPANY one million

[Volley]

First! I added an umbrella policy 6 months ago for exactly this reason! Thanks Clark!

[brianhill]

State Farm umbrella in Texas is $290 for this next year for 1 mil coverage. Called to see what it would be to increase to 2 mil and it would be $465. So not twice as expensive but close to it.

[maverickspirit]

Clark, you did not explain how umbrella insurance is, how it works, or the different types of umbrella insurance. I hope that you do so in the future.