Umbrella Insurance

January 24, 2007 9:39 AM

Insurance filter Umbrella insurance - good for them or good for you?

My insurance company and, now, other insurance companies keep telling me how wonderful umbrella insurance is and how absolutely essential it is that I buy it. Googling umbrella insurance will get loads of example of insurance companies trying to sell it. But does the average homeowner (no business, no special situation) really need it or is it just another money-making scheme for the boys and girls in Hartford? If you bought it, why and have you benefited?

posted by TheRaven to work & money (4 comments total)

In California, when I looked at it a few years ago, one useful thing about umbrella liability insurance was that you could tap it yourself if you were injured by an uninsured/underinsured motorist and your damages exceeded the other party's coverage. There were some caveats that I don't remember now (your own auto liability had to be over a certain amount, maybe 200K-300K, etc.) but I remember thinking that it was a good deal, given that it's pretty inexpensive and also given the prevalence of un/underinsured motorists in California.

I don't know whether it still works that way, but it's something to consider if you live out there.

(IAAL, but IANYL. YMMV. Void where prohibited by law.)
posted by spacewrench at 9:59 AM on January 24, 2007

My friend was in an accident pretty recently and was facing a lot of damages. The insurance company was ready to drop him and just pay the max on his coverage(I didn't even know they could do that) untill he mentioned that he had an umbrella policy for an extra million. They got a couple lawyers on his case and he got off paying a lot less.

I think its cheap enough to justify, even though you may never use it in your lifetime.
posted by aznhalf at 10:08 AM on January 24, 2007

Funnily enough my auto insurance company mentioned this to me just last night (I'm in VA). I have a soon-to-be-driving teenage son (who incidentally had a great time at the 9:30 club in DC, thanks in no small part to replies I got to a question posed here last week).

They offered me umbrella insurance which I had never heard of before. For less than $250 a year it will cover us in the event we are sued for more than our normal coverage if (God forbid) he is involved in a really expensive accident that results in high liabilities. So for that amount I think we will get it and just have that extra cushion/peace of mind if needed.

Not sure what your situation is, but for this scenario it looks like a good bet.
posted by 543DoublePlay at 10:54 AM on January 24, 2007

I have one. It's cheap insurance, and if you have assets that may get taken if you're sued for more than your primary coverage (on car or home), it may be a good idea.
posted by dpx.mfx at 1:55 PM on January 24, 2007