A CFP talked to us about getting umbrella insurance a few years ago. I understand the basic premise of protecting assets.
I’m having a difficult time justifying it. We don’t engage in high risk behaviors. If we go out we don’t drink and drive. We don’t smoke; anything. At our ages we seldom even drive at night. We don’t have teenagers or 20s something living here. I’m retired and she works from home, hardly drives. Just her and me at home and an old dog.
Jimtoo, I thought I saw in one of the threads that you have umbrella. Thoughts?
I have a million dollar umbrella policy, I’ll probably never need it but it’s cheap and nice just in case. I don’t feel like digging out my insurance paperwork, but I think it’s around $150 a year.
We carry a $2M umbrella policy. For several years I considered it cheap insurance, but the premium has escalated over the last 2-3 years and is over $500 this year. The old saying about umbrella coverage is cover what you can not afford to lose may not be as valid as it once as.
But our activities are similar to yours. Unfortunately, that may not matter to someone who is injured on your property, in your car, who crosses in front of your car, who hits you car, that your car hit, etc. It sometimes seems like anyone who is injured by something thinks it is someone else’s fault and not their own, and one needs to defend themselves.
We have also experienced large increases in both homeowners and auto insurance the last couple of years. I even raised the deductible on our home policy to $25K, which held the line for a couple of years but no longer. I suspect that is due to the large fires in the state over the last few years (all started by the US Forest Service), but we will never have a large fire near our house because there is not enough vegetation to support a major fire. Also raised the auto deductibles to $1K, but that barely slowed the increases.
Everyone has, I read just for 2023 insurance is up over 18% across the board. This summer I’ll probably shop for a new insurance company, I’ve been with State Farm for over a decade but lately the premiums keep creeping up every year.
We’ve had no claims and our premiums went up 20% on auto and 25% on home owners.
My experience on shopping around and going with a different company is that they get you on board with a teaser rate the first year and then two maybe three years at the most our premiums are right back where they were or in a some cases higher. I don’t see the hassle in shopping around and jumping ship every year.
I have an umbrella because my auto insurance won’t pay out beyond 300k. I’m a safe driver but if I put somebody in a wheel chair, they’ll come at me for more than 300k.
The most dangerous thing you can do is drive and there are plenty of ambulance chasing lawyers. The umbrella.polixy is a success tax due to the litigious society we.live in.