r/personalfinance • u/dereku1967 • 12h ago
Too much umbrella insurance? Auto
I am not an attorney, but I work with one in a large company. We were talking a few weeks ago about umbrella insurance. She said she only carries $1M, because the first thing the opposing attorney will ask for is for the total insurance amount available. She believes a higher Insurance value makes you more of a target. I’m currently insured for $5M, and if there’s any logic behind this, maybe I should drop mine down to just $1M.
For context, I’m in my mid 50s, but have one son who will be driving on his own in about a month, and a daughter who is still only 15 so I’m just now approaching my nervous years.
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u/murppie 12h ago
So I used to sell insurance and your attorney friend is the kind of customer who worries me. The fact that they are a lawyer makes them a target because your umbrella policy should cover your assets.
Think of it this way. A normal person making 50k/year who rents an apartment and owns an old Toyota Camry. They've got $3k in their bank account and they get into an accident and kill someone. What money could the family of that person go after? $3k in the bank? garnish their wages? If that person has a $1 million umbrella policy any personal injury lawyer takes a settlement.
Now take your attorney friend making $200k+/year. They own a $2 million home, $1 million lake house, rental properties, they own 3 BMWs, they have $100k stashed away for a vacation fund, they've got $10 million in stocks. They kill someone in an accident and they have a $1 million umbrella policy, why would any lawyer accept that $1 million settlement when ? They would see $$$$ and the amount of assets they have and pursue that until they win.
At the end of the day, your liability coverage should protect your assets.