Quote:
Originally Posted by lawgolfer
You buy the basic insurance as the primary policy. The primary policy will be more expensive as it has many obligations, such as paying all of the fees of the attorney it has to hire to defend you against all lawsuits, whether they are frivolous or not. Primary carriers have to investigate all claims, whether by you under the 1st party coverage or by a 3rd party against you. They have to pay all the "nuisance" settlements in the lawsuits filed by the hordes of attorneys, cranked out by our law schools in the last 50 years, for the clients who watch their TV ads. They also have had to pay for all the "free" roofs obtained by so many of our fellow residents.
You then buy an "umbrella" policy. This provides "excess" coverage above the limits of your primary policies, both homeowners and auto. Also, it provides some additional coverage for claims that are excluded from the primary policy, such as for libel, slander, trespass, false arrest, and assault and battery (the 'Umbrella" part"). Get into a p***ing contest with a litigious neighbor and you'll learn why you need an "umbrella". This insurance is relatively cheap as it seldom comes into play, and when it does, many of the expenses have been or will be paid by the primary carrier.
Carriers selling "umbrella" policies are like title insurance companies. They always have ONE horror story where they had to pay out money, thereby saving an insured from ruin.
Since retiring, I have a primary policy with limits of 100/300, including UM/UIM, with an "umbrella" that raises both limits to $1M. I'm not sure that is enough; however, I don't drive as much as in the past; I don't have a litigious neighbor; and, my beautiful wife is certain to be a sought-after widow.
|
Thanks. I am familiar with umbrella policies. But as a practical matter, most people do not buy an umbrella policy, so they are living with totally inadequate coverage that was recommended to them by an insurance "agent".
I had an umbrella policy years ago. I could be wrong, but I seem to remember that it only covered personal liability, not a "pain and suffering" claim under UM insurance, which doesn't involve any personal liability. I say this because I only had to increase my home and auto liability limits to qualify for the umbrella policy.