[bimmertl]

Originally Posted by GatorFan

Pensions, social security, annuities, Ira & 401K's are some of the judgement proof assets in Florida.

CDs, Stock, Bonds, Savings & Checking Accounts, Rentals are some of the assets that are not judgement proof in Florida.

This is a conversation you should have with a professional financial agent or your property casualty agent to determine what your liability exposure is and how much coverage you should purchase.

Judgement proof means they can not be touched if someone gets a judgement against you. Unsafe investments can be taken.

You are most likely referring to the bankruptcy exceptions available in Florida. These items are "protected" from seizure by creditors if you file for bankruptcy. If a large judgment is granted against you, you'll need to file for bankruptcy to protect those exempt assets. Most likely something you wouldn't want to do.


Florida Bankruptcy Exemptions, Ruff & Cohen

[l2ridehd]

For me the value of an umbrella was to lower overall insurance cost while increasing the coverage. Rather than having a 1 million liability on auto and home liability coverage, I was able to drop those to 300K and 500K and purchase a 3 million umbrella policy. Total cost was less and total liability coverage moved from 1 million to 3 million. How much coverage you need is subjective, but having rental properties, an LLC for the golf carts, a motorcycle and probably other exposures it made sense to improve coverage for less cost.

[bonrich]

We have carried a one million dollar umbrella policy for years. Cost is minimal in the possibility of losing so much since there are now two properties that are involved, primary and secondary homes, etc, etc.
There is so much to be said for peace of mind, just in case. You do not want to have that shoulda, woulda, coulda moment.

[rubicon]

The discussion of "being judgment proof" is a big issue of discussion in lawsuits. essentially the courts do not want to see people who otherwise are self sufficient end up on the dole.

the bigger issue sometime are punitive damages ( punish the defendant) rather than compensatory( expenses , wages, physical/psychological injury)
creating a trigger for an Umbrella

[bimmertl]

Originally Posted by rubicon

The discussion of "being judgment proof" is a big issue of discussion in lawsuits. essentially the courts do not want to see people who otherwise are self sufficient end up on the dole.

the bigger issue sometime are punitive damages ( punish the defendant) rather than compensatory( expenses , wages, physical/psychological injury)
creating a trigger for an Umbrella

Most policies do not coverage for punitive damages and in addition, they exclude providing a defense for claims alleging punitive damages. In addition, in Florida it is against public policy to provide coverage for such damages. See paragraph 4 in the link.

“Damages” Does Not Include Punitive Damages; Insurer’s Duty to Defend Ends Where Complaint Seeks Only Punitive�*Damages - Executive Summary - Wiley Rein LLP

[TrudyM]

Originally Posted by GatorFan

Pensions, social security, annuities, Ira & 401K's are some of the judgement proof assets in Florida.

CDs, Stock, Bonds, Savings & Checking Accounts, Rentals are some of the assets that are not judgement proof in Florida.

This is a conversation you should have with a professional financial agent or your property casualty agent to determine what your liability exposure is and how much coverage you should purchase.

Judgement proof means they can not be touched if someone gets a judgement against you. Unsafe investments can be taken.

Florida's laws on protected assets are one reason some people move to Florida. I know people with ex-spouses who have moved to Florida to protect their current spouses if they should die from greedy ex's and kids from first marriages.

We have an umbrella policy and it is worth the small amount it costs for my piece of mind. It is not just assets if you have a place in another state and get a judgement against you some states allow garnishment of payments you are getting like pensions.
I was advised to deposit the max in Roth ira's each year as the money we withdraw is protected from such judgements in places like Florida and they are after tax dollars that can grow tax free. We can still invest it in whatever we like and take out money when we need it but it is an additional layer of protection. I could be wrong but at least that is my understanding.

[sandybill2]

We just got an umbrella policy through our auto insurer (AARP-Hartford)---In these days of so many law suits, we did it for peace of mind. Had to increase our liability on auto to the 250/ and also on our golf cart. We just have an electric Club Car- with insurance through Foremost. Found out that there is coverage for an uninsured (driver) cart - Never heard of that but cost was so minimal we added it as well.

[Jim 9922]

The way I view umbrella coverage is that it buys you much better legal defense/coverage. Say you ARE at fault for some damage, are being sued for an overly large amount, say $1,700,000 and you have a $3,000,000 umbrella. If you had only $300,000 of coverage the insurance company may decide it is cheaper to pay the claim and walk away leaving you to fight the remainder of the claim, $1,400,000. But, you can bet they will stay in your corner if they are on the hook for the full claim. The potential loss of millions buys much better and many more lawyers' fees.

If you are going the umbrella route, my suggestion would be to consider using the same insurance group to insure all the basic risks and of course use a compentent agent to make sure all risks are covered and scheduled in the umbrella policy. If disaster happens, you want everything to be seamless and not have different insurance companies fighting among themselves.

[Bavarian]

If you have a $1 Million umbrella can they still get your assets over the umbrella limit? Or can they get both?

[784caroline]

Originally Posted by Bavarian

If you have a $1 Million umbrella can they still get your assets over the umbrella limit? Or can they get both?

From a technical point, the answer is YES....if you have $2 million in unprotected assests, any lawsuit could go after the $2million and that would include your assests above the $1milion coverage. That said in reality it is very unlikely it would ever get to that point. It would have to be a fairly major incident that you were involved in for any judgement to reach that level..

[784caroline]

Believe it or not at this stage of life for most of us, having an umbrella policy is more critical in protecting your estate than life insurance.....although it would be wise to have a certain amount of both. Each individuals needs are different.

If you have substantial assests and need an umbrella policy but dont have it and then you are involved in a bad liability lawsuit, you can lose everything you have, whereas when (not if) you die and have no or little life insurance, your estate just doesnt have as much!

[JourneyOfLife]

You might check your local library for books on "Asset Protection".