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The umbrella policy provides excess liability coverage for all underlying policies including the HO policy.

My 4M policy which includes 2M uninsured motorist coverage runs $1,155/yr. The cost varies by area just like car insurance does.

Little known fact: Some policies reduce the coverage by the cost of defense/legal fees~that's not trivial.

Bill
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Four phases of retirement:

Phase 1 : Can I do it?
Phase 2 : Dare I do it now?
Phase 3 : I'm going to do it now!
Phase 4 : I should have done this years ago!!!!!

Howie52
Getting calls for me to come back to work.
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Four phases of retirement:

Phase 1 : Can I do it?
Phase 2 : Dare I do it now?
Phase 3 : I'm going to do it now!
Phase 4 : I should have done this years ago!!!!!


Based on nearly 11 years in a retirement community, too many hit Phase 5:

"What am I gonna do? I can't afford this!"

We had a lot of people hit that phase in 2008 and 2009, after the market collapsed. And we're hearing it again now for more than a few residents...
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Four phases of retirement:

Phase 1 : Can I do it?
Phase 2 : Dare I do it now?
Phase 3 : I'm going to do it now!
Phase 4 : I should have done this years ago!!!!!

Based on nearly 11 years in a retirement community, too many hit Phase 5:

"What am I gonna do? I can't afford this!"

We had a lot of people hit that phase in 2008 and 2009, after the market collapsed. And we're hearing it again now for more than a few residents...


They made the mistake of thinking that the good times were permanent, and retired without enough money.

I would add
Phase 2.5 : "Hey Fee-only Financial Advisor, what's your opinion of our portfolio and financial state? And how could you help us?" FA: "What do you need me for?"

(We talked with two such. One of them said, when I started to write out his check. "I can't take your check, you don't need my service and I wouldn't feel right taking your money.")
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They made the mistake of thinking that the good times were permanent, and retired without enough money.

True. Maybe phase 4 should be divided into those that were successful and those that were not. It's not until you actually retire that you can be successful or fail.

But the only way you know if you had enough money is if it does last. Pension companies can fail. Accounts can be drained. Annuity companies can fail. Insurance companies can fail. Uncovered medical bills. Divorce. Liabilities could occur. Etc. Etc.

Sure, more money could make those things irrelevant, but no one is going to plan for the worst case. Very few people would ever retire if they had to account for everything.

Would your liability insurance cover accidentally running over the neighbor's 3-year-old kid while backing out of the driveway, and turning her into a quadriplegic that requires a lifetime of expensive medical care?
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Would your liability insurance cover accidentally running over the neighbor's 3-year-old kid while backing out of the driveway, and turning her into a quadriplegic that requires a lifetime of expensive medical care?

Because we have teenage drivers in the house, we’ve recently added an umbrella liability policy on top of the regular auto insurance. About $50 a month buys $2M of insurance and a great deal of peace of mind. This covers the teenagers as well.

Regards,

- HCF
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About $50 a month buys $2M of insurance and a great deal of peace of mind.

Which might cover a year or two of care for a quadriplegic... :(
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Which might cover a year or two of care for a quadriplegic... :(

Sure, let's use extreme examples.

PSU
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Which might cover a year or two of care for a quadriplegic... :(

Sure, let's use extreme examples.

PSU


There was a spinal injury in our household (due to an aftermath of a tornado). The first hospital bill for care and therapy (first 3 months) was $3M+. That was only the first bill...
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The first hospital bill for care and therapy (first 3 months) was $3M+. That was only the first bill...

Must have been before max out of pocket rules or did this person not have adequate insurance?
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About $50 a month buys $2M of insurance

You might be overpaying. Mine through State Farm is $7 a month for $1m.
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Teen drivers add significantly to the cost of an umbrella as they do tho the underlying auto insurance. The cost to increase coverage from 1M to 2M us usually around +50%. A good value IMO.

Bill
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Sure, let's use extreme examples.

You wouldn't consider the market decline in 2007-2009 to be an extreme case? Only the 1929 crash was worse.

That is, when I said:

[My retirement community] had a lot of people hit [the "I can't afford retirement"] phase in 2008 and 2009, after the market collapsed.

...I was told they "retired without enough money". But it was an extreme case that affected them. Anyone pushing the envelope got squashed. What were the odds?

And, such crashes have long-term fallout as well, because people become fearful of the market and avoid it. Thus missing out on the recoveries we have seen (so far). In 2007, people were also not fearful of going overly in debt on real estate, not only because they could, but also because they were fed the line that "real estate values have never failed"...
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"...I was told they "retired without enough money". But it was an extreme case that affected them. "

There's no doubt that extreme cases cause damage (often permanent).
But there's no practical way to protect yourself against most of them.
Even a vigilant person can be hit on a sidewalk by a drunken driver while walking in their own neighborhood.
You can reduce some of the risks by avoiding extremes of behavior for yourself, but you are always at risk for an extreme case.

That's why they should generally be ignored in your strategies. Protect yourself against the 98/99 percent likelihoods knowing that in the extreme you will lose.

In the end, we are all dead...
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There was a spinal injury in our household (due to an aftermath of a tornado). The first hospital bill for care and therapy (first 3 months) was $3M+. That was only the first bill...

My point is if you plan your retirement to include running over the neighbor's kid as a common event instead of a rare event, none of us could ever retire.

PSU
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Even a vigilant person can be hit on a sidewalk by a drunken driver while walking in their own neighborhood.

I had a relative that had the opposite happen to them.

Driving down a section of 4-lane road at night, speed limit 35 mph. Lights and crossings only at the intersections on long blocks. A drunk came out of a bar mid-block, tried to cross the street to get to the park on the other side of the road, instead of going to the corner to cross at a controlled intersection.

He walked into the side of the car and was killed. Slight dent on the side of the car, but damaged the side-view mirror. At one point, there was a $5M wrongful death suit filed, including loss of income and companionship and whatever. The insurance company finally settled for a lot less, just to get rid of the nuisance of the suit. But it was a stressful nearly five years, especially since it occurred while using a rental car, while visiting another state. Several times, my relative was told it had been settled, only to have it resurface again a few months later.

I never did hear if the family went after the bar owner as well. As I recall, the customer's blood alcohol was cited as "several times the legal limit".
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Hawkwin writes,

Must have been before max out of pocket rules or did this person not have adequate insurance?

</snip>


Max out of pocket rules don't protect you from the "out-of-network" billing scam.

intercst
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I never did hear if the family went after the bar owner as well. As I recall, the customer's blood alcohol was cited as "several times the legal limit".
---------------------------------------
Legal limits only apply to drivers. Not pedestrians - or passengers.

Bill
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Legal limits only apply to drivers. Not pedestrians - or passengers.

True, but "public intoxication" is still a crime...

They must have thought it to be relevant, in order to draw a blood sample?

I recall issues with a bar in the Uptown area of Minneapolis. At one point, they were talking about testing people leaving the bar and charging both drunk patrons and the bar owner if people were intoxicated as they left (going into public)? Maybe it wasn't a blood test, though?
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Legal limits only apply to drivers. Not pedestrians - or passengers


Yabbut... over 30% of pedestrians killed in car accidents have alcohol in their systems. A couple of years ago there was a campaign designed to raise awareness of the dangers of.... being a drunk pedestrian.
https://www.google.com/amp/s/www.medicaldaily.com/drunk-walk...

I know for a fact that pedestrians can be charged with “PUI” (pedestrian under the influence) in Georgia, and probably some other states as well. (I’m an auto claims adjuster).

And I have seen several situations where pedestrians with alcohol in their systems were deemed to be comparatively negligent and thus barred from recovery (in jurisdictions where that’s allowed).
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RE Umbrella Policies


About $50 a month buys $2M of insurance

You might be overpaying. Mine through State Farm is $7 a month for $1m.


Are these real amounts?
600/yr for 2M coverage
84/yr for 1M coverage

I don't know much about insurance, but my umbrella is through my house insurance company and
it's over 500/yr for 1M coverage.

Can you buy umbrella insurance without it being tied to your house insurance?

thanks
nag
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I pay $800 a year for a $5M excess policy which also lowers my homeowners premium.

Htownrich
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"I don't know much about insurance, but my umbrella is through my house insurance company and
it's over 500/yr for 1M coverage.

Can you buy umbrella insurance without it being tied to your house insurance?"


My million dollar umbrella policy requires I have 500K auto insurance as well....running up that cost a bit.

The umbrella policy is $250/yr.


t.
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nagdabbit,

You wrote,
Are these real amounts?
600/yr for 2M coverage
84/yr for 1M coverage


I can neither confirm nor deny my experience with coverage; but the first figure seems about double and the second seems to be about half... So maybe they're in the ballpark - depends on the insurer and where you live.

- Joel
Who's heard umbrella insurers don't really appreciate you disclosing that you have this coverage unnecessarily - at least when it comes down to litigation.
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The umbrella policy provides excess liability coverage for all underlying policies including the HO policy.

My 4M policy which includes 2M uninsured motorist coverage runs $1,155/yr. The cost varies by area just like car insurance does.

Little known fact: Some policies reduce the coverage by the cost of defense/legal fees~that's not trivial.

Bill
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Who's heard umbrella insurers don't really appreciate you disclosing that you have this coverage unnecessarily - at least when it comes down to litigation.

You should never disclose your limits of insurance unless required in the locale where you live, and in that situation, you should have an attorney anyway to advise you.
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Little known fact: Some policies reduce the coverage by the cost of defense/legal fees~that's not trivial.

Yeah, that's called an eroding policy or a defense within limits policy, and you don't want ever want that. You always want your legal fees on top of and separate from your liability policy limits. If you have an eroding or diminishing policy, you could still be left with a big judgment to pay after litigation. I'm not sure if that's typical on personal policies, but it's not super uncommon on commercial policies, but to me it seems very dangerous.
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I pay $345/yr for a $5MM umbrella policy. Of course, the premium depends on how risky you are.

intercst
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I pay $345/yr for a $5MM umbrella policy. Of course, the premium depends on how risky you are.

intercst


Mine dropped significantly when the kids moved out!
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I have 2 million through State Farm for $564 per year. It is not part of a homeowner or auto package. I live in L.A. if geography makes a difference.

Vivienne
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