Do I need an One million dollar Umbrella Policy?

I currently pay $46 a month for my auto insurance and about $13 a month for my renters insurance. My auto insurance is 300k per person/300k per accident. Here is my financial situation

Age 27
Salary 50,000
Securities portfolio 21,000
401k 38,000
Emergency Fund 11,000
Vehicle Honda Civic

I rent my home (with roommates). Geico gave me a quote of $151 per year for an 1,000,000 policy. Yes it's only $12 a month, but I really don't know what I could possibly do to cause a million dollar accident unless I hit a guy on a motorcycle or take out a Ferrari and then total a Bentley too.

You hit a kid, breaking his spine, causing him to be unemployable for the rest of his life, medical bills will easily top 5 million, plus his life long pain is worth 3 million, plus the loss of affection to his parents is worth 1 million for each parent. Oh and his bicycle is $60.00

You need at least a million liability coverage.

I don't really think you need the umbrella policy. I didn't get one personally until I started owning rental properties.

ozarkhokie said:   What is the price of upping just the auto policy to 1 Million?

The increase to an umbrella policy of $1 million dollars is only $12 a month, which is why I'm leaning towards just getting it in case I cause an accident and the other driver hires Saul Goodman.

Oh, I was thinking umbrella meant that it was a policy to cover you for any liability, not just auto-related. In reality, you probably dont need it, but I bet if you were ever sued, Geico would bring in some serious legal support.

OmarLittle666 said:   ozarkhokie said:   What is the price of upping just the auto policy to 1 Million?

The increase to an umbrella policy of $1 million dollars is only $12 a month, which is why I'm leaning towards just getting it in case I cause an accident and the other driver hires Saul Goodman.

You know why it's so cheap right? Because you the odds of you ever making a claim are ridiculously small. You are seriously worried about injurying another driver? And if you did hurt someone, you're paying $151 a year to protect what? 50K in assets? If you had significant assets to protect, or you have things which exposed you to more liability (other than a Honda Civic) then I would say that an umbrella policy would be a good idea. But then again maybe you are a terrible driver and expect to cause bodily harm to others in the near future.

All that said, if you feel like spending $151 to make you feel all warm and fuzzy, then by all means go for it.

ironfist99 said:   And if you did hurt someone, you're paying $151 a year to protect what? 50K in assets?
My understanding is that wage garnishment is always possible. As SIS said you can always file for bankruptcy and start over. So basically the $151 is to protect against needing to file for bankruptcy.

OmarLittle666 said:   ozarkhokie said:   Oh, I was thinking umbrella meant that it was a policy to cover you for any liability, not just auto-related. In reality, you probably dont need it, but I bet if you were ever sued, Geico would bring in some serious legal support.

It covers renters and auto insurance. It's only $12 a month. I spend more than that on energy drinks per month.

I raised my vehicle liability to 1 million on my Geico and my 1 mil umbrella cost dropped to $79.

bopc1996 said:   I raised my vehicle liability to 1 million on my Geico and my 1 mil umbrella cost dropped to $79.How much did your auto insurance cost go up? How much did you end up saving overall? I was under the impression that it was cheaper to get the high amount on the umbrella policy and drop the auto policy amount.

If you don't own a car or home, can you still get a decent umbrella coverage?

Does umbrella poilicy cover professional liability as well? for a sole prop.?

vickh said:   Does umbrella poilicy cover professional liability as well? for a sole prop.?

prof liability usually runs about 10x what an umbrella policy might. general liability, about 3-5x. Of course it depends on your occupation and risks.

bluegreenturtle said:   billrubin said:   bopc1996 said:   I raised my vehicle liability to 1 million on my Geico and my 1 mil umbrella cost dropped to $79.How much did your auto insurance cost go up? How much did you end up saving overall? I was under the impression that it was cheaper to get the high amount on the umbrella policy and drop the auto policy amount.
The point is though that most umbrella policies require you to up the auto amount, as well. Mine says 500k required on auto for the umbrella to be in effect.Yes, but very unlikely that it's $1m. And I thought that one of the benefits of an umbrella policy is that it's less expensive than comparable coverage on individual policies.

As as someone else already said, the minimum with Geico is $300k.

bopc1996 said:   Farmers Insurance charges $375 for 1 mil umbrella policy.
It really depends on your personal situation as to what your umbrella insurance will cost. Where you live, how many cars you have, your driving history, age of drivers, etc. all impact the rate.

rpi1967 said:   vickh said:   Does umbrella poilicy cover professional liability as well? for a sole prop.?No, does not cover business liability or rental properties
you sure about that? I'm pretty sure my umbrella increases the max liability on all policies I have with that company, including the ones for my rental properties.

biomedeng said:   ironfist99 said:   And if you did hurt someone, you're paying $151 a year to protect what? 50K in assets?
My understanding is that wage garnishment is always possible. As SIS said you can always file for bankruptcy and start over. So basically the $151 is to protect against needing to file for bankruptcy.
Exactly.

While op has limited assets and could probably easily file bk and keep everything he has if need be , people who have substantial assets cannot file bk and keep everything so easily, so the cost of an umbrella becomes much more worthwhile than in op situation.

bopc1996 said:   Farmers Insurance charges $375 for 1 mil umbrella policy.

When our neighborhood had hail damage and everyone was getting their roof, and some were getting their siding done, all for the deductible, the folks who had farmers were told there is no damage. Thats one insurance company I will never use, because it seems like a waste of $$$ since they don't pay out.

BlueSeaLake said:   You hit a kid, breaking his spine, causing him to be unemployable for the rest of his life, medical bills will easily top 5 million, plus his life long pain is worth 3 million, plus the loss of affection to his parents is worth 1 million for each parent. Oh and his bicycle is $60.00

You need at least a million liability coverage.

Moral of the story is... if you hit a kid, make sure he's dead.

psychtobe said:   BlueSeaLake said:   You hit a kid, breaking his spine, causing him to be unemployable for the rest of his life, medical bills will easily top 5 million, plus his life long pain is worth 3 million, plus the loss of affection to his parents is worth 1 million for each parent. Oh and his bicycle is $60.00

You need at least a million liability coverage.

with your figures you need $10,000,000 in umbrella. Do you have that? Does anyone here have that much? Of course not. You can't live your entire life being paranoid.

I am sure there are people with over $10M coverage for personal liability. But the point is to have a umbrella policy. When the other lawyer find out you have $1M coverage and $200K asset. Do you think they will risk lawsuit to go after you for the full $1.2M or just take the $1M on the table? You should adjust your coverage according to the above scenario.

Great information and discussion in this subject.

I am also in the market for umbrella policy.

Thank all.

Hmm interesting. I'm going to shop around a few other insurance companies than for a complete quote for all three (auto, renters, and umbrella). Any favorite all-in-one companies?