Personal Umbrella Insurance - Consider It If You Can
Some time ago I was sued by a large corporation over a negative review I posted on this site. The case was eventually settled, and I am not allowed to talk about the terms or mention the company's name any more. But I will say the review is still up and unchanged and sits on the first page of results on Google for that company's name, so draw what conclusions you may.
But the case generated over $50,000 in legal expenses for me. I probably would have paid that out of pocket just because I am curmudgeonly and was not going to back down, but in fact the legal costs were 100% covered by my personal liability and umbrella insurance. Basically an umbrella means that if anything goes over the coverage limits of your policies, or slips through the cracks of your policies' various coverages, the umbrella kicks in. The cost for the umbrella is close to a rounding error on my other insurance costs. I am not even sure I asked for it initially, my helpful insurance guy just threw it in there for a few extra bucks.
A lot of people have to knuckle under to bullsh*t legal threats from corporations and the wealthy (think about all of Donald Trump's silly libel suites) because they can't afford to fight. Arm yourself with the financial tools to fight such things. Now, there may be (as with most insurance) good versions of this policy and bad ones. I am sure we have some insurance folks in our readership who can say more in the comments.
kidmugsy:
For heaven's sake be careful! Soon some politician will insist on a National Umbrella Service. Clintoncare?
August 11, 2017, 10:55 amdfojsdgjsdpfojp:
+1 - I am regretting not purchasing the additional $15 a month coverage (I didn't know it existed). Typically umbrella liability requires both maxed out car and home owners/renters insurance liability coverage and is a steal above those limits and is therefore not available for five to ten years once you have had a liability claim.
Get it if and while you can.
August 11, 2017, 11:09 amEau de Javelina:
I assume this doesn't cover you if the lawsuit is business related. Is there an equivalent insurance if you had made these comments under the name of a business instead of personally?
August 11, 2017, 11:11 amcraftman:
I got mine through State Farm - adding an additional policy to my account upped my "multi-line discount" by another 5% and actually made the total additional cost about $1/month for $1 million coverage. And that was in addition to upping my car insurance to 250/500 from 100/300. Crazy. Not sure if other insurance companies have multi-policy discounts is only reason I plugged State Farm specifically...
August 11, 2017, 11:33 amMatthew Teague:
Long time reader, licensed insurance agent here. The main barrier to people getting umbrella coverage is auto liability limits. Most companies require 250/500, which you SHOULD have regardless... but too many people skimp on this.
The average person can probably get $1 million on an umbrella for $150-300 depending on where you live. I highly recommend it.
August 11, 2017, 12:04 pmMatthew Teague:
General Business Liability covers similar to an umbrella for business interests. If you have are in business, you should have one.
August 11, 2017, 12:05 pmMatthew Teague:
Most companies will write an umbrella as long as your home has at least $100,000 in liability. That's standard for most renter's insurance policies. Most home policies come with $300,000 in liability and you can actually lower that if you have an umbrella, though I wouldn't recommend it.
There are companies that will right umbrella coverage for those with 100/300 auto liability coverage - American Family insurance I believe does this, and that can help price conscious shoppers or those with difficult automotive history get one.
I recommend carrying as much liability as you can comfortably afford.
August 11, 2017, 12:07 pmmjed:
I know the story - am I allowed to mention the company's name in comments or would that get you in trouble under the terms of your settlement?
August 11, 2017, 12:27 pmirandom419:
I should reiterate that you need the 250/500 on your auto liability irregardless. Lawyers are nothing more than bill collectors and given a pot of insurance money or your house, they will go after the former.
August 11, 2017, 1:32 pmRecovering libertarian:
Trump's libel suites? Really, Warren?
August 11, 2017, 6:26 pmjdgalt:
*cough*cough*cough* I can't possibly imagine whom you mean! ;-b
August 11, 2017, 7:53 pmsteamboatlion:
My insurance broker said something along the lines of "first rule of law suits: go for the deep pockets. You've got assets, so you're a deep pocket. You need an umbrella policy." About $200 pa for $1M in coverage.
August 11, 2017, 9:43 pmMcG:
IANAL, but I know how they think -- and I'd advise against it.
August 12, 2017, 12:36 pmDinomyte633:
I second the State Farm multi-line discount. We had an umbrella due to our rental property and when we sold it we figured we didn't need it any longer. Get a call from our agent saying the payment was due and I let her know we're letting it expire. She quickly reminded me that our rates would actually go up if we cancelled our policy due to the multi-line discount.
August 18, 2017, 6:40 pm