Great content on your channel. Very valuable. Since we're on the topic of wealth preservation and protection. I think a video series on divorce would helpful to those that don't understand that divorce proceedings are a lawsuit and marriage is the ultimate busines contract. A contract that most get nto without a attorney, but need one or more to get out of. The ones that haven't been destroyed by it don't realize how family law operates in it's own realm with no oversight and court orders are only as good as the judge, with judicial immunity, tjat will or will not enforce it. A common misunderstanding is that prenuptial agreements provide protection. The road is littered with so many individuals who toiled to protect their generational wealth only to end up broke, broken, and indentured while attorneys and other parties extracted their wealth from them and their children. So many have ideas on what they think should happen, what's "just" and that they know how to protect their family only to learn it operates by a separate set of rules. Your take on how to prepare for what has a 50 percent chance of happening to married couples by the 15th year would be really helpful. Thanks for doing what you do!
A big advantage of an umbrella policy is it provides first rate legal protection if you are sued. With a large policy the insurers are more likly to defend their interest in the umbrella by providing robust legal protection.
What about with the DEQ how do I be assured that I've got coverage and if I'm insuring with two different companies through the same agent Allstate and the agent that she represents what are the questions that I need to look at and make sure of thank you very much
General Insurance Methodology - my dad always said, “I only insure things that I cannot afford to replace.” So while he had homeowner’s insurance and business insurance, he never paid a dime for auto collision insurance. Only one of his vehicles got totaled and it was so egregiously the other driver’s fault that they paid for it. Definitely was a net positive choice for him, financially. While I do carry auto collision coverage even though I can afford to replace our vehicles, I use the same “only insure what you cannot afford to replace to deductibles. That means most of our deductibles are the highest possible. (You do have to price out different levels though to evaluate the premium cost.) High deductibles also make sense because, if you’re smart, you don’t make insurance claims unless they are expensive replacements/repairs… to protect your rating. Even small claims kill your future rate. And any claim against your home gets tagged to both you and the home. Too many claims against a home can make it sale-proof because the next owner gets shocked by their quote.
The point on the auto accident is good. Someone pointed out to me many years ago it's not just covering your vehicle. What if you hit one (or multiple, as you pointed out) very expensive vehicle(s)? The costs will add up quickly.
Sharon, aren't umbrella policies "lawyer bait"? If I have assets worth $2 million and a $2 million umbrella policy...isn't a judgement likely to go up to $4 million should I be found guilty of negligence? I have a budy who is an "ambulance chaser" (my term). He says he loves defendants who have umbrella policies because juries award much higher amounts knowing it's all covered by insurance. Wouldn't it be money better spent keeping assets overseas?
I was wondering the exact same thing. It seems like you can always lose your assets no matter what your umbrella/liability insurance is - if the judgement is high enough, it seems like you lose.
@DavidDarakjy ...David, we understand the purpose. The question is whether having the higher coverage will cause a jury to award a higher settlement since it's "insured".
From my litigator friends that is entirely possible. But when your insurance company only has $30k to lose they don’t make much of an effort to defend you, even when it’s clear the case is a scam. When you have a $10MM policy they will spend millions trying to win the case. This is one of those situations where i look at the $1,800 premium and compare it to the dozens of other ways i waste money on silly things. Right or wrong, it lets me sleep better at night.
I recently asked my broker about specific types of scenarios and if I would be covered (for business) and it felt like I was talking to a 7year old…he had very little concept about the simple scenarios I was explaining. Do you have any advice on how to search for brokers or is it possible to work directly with an insurance company?
I have never found an insurance broker who was able to even come close to understanding my business and the risks I face. I have tried working directly with the insurance company in the past but they won't answer any questions about the policy and usually just try to refer you back to a broker. I don't have a great solution on this topic - it is probably the biggest issue I face with my business. I've spent countless hours reading books, studying the insurance industry, and just tried to figure this out myself. I've been exploring doing a captive insurance company but haven't set this up for myself yet.
@@sharonwinsmith thanks for the response, thanks for bringing this back to my attention as it’s something I need to look into. Why is it that “broker” can be described as “unnecessary middle man”?!
The only part I don't understand is the correlation between your net worth and how much insurance you should carry. Isn't the idea to carry enough insurance so the plaintiff can't get to any of your money? Whether you're worth $500k or $2M, why not just carry a $2M umbrella, they're not very expensive. Thanks
I think on your facts, you would always carry at least a $2M umbrella. There are two issues that come up with deciding about how much coverage to carry - 1. you can be sued for future earnings sometimes too. So even if you have $2M today, the judgment could exceed that. Stated otherwise, the judgment could exceed your current net worth and you be required to pay that out of future earnings. 2. What to do when you have net worth of $5M+. Say someone has net worth of $20M, how much coverage do they need? That's a hotly debated issue. Cost and availability of coverage at higher amounts isn't the same as when you're just talking about a $2M policy.
Federal law protects 401k accounts and pensions from judgements, and IRAs/Roth IRAs up to $1M, but state laws may or may not give higher levels of protection. Best to check with your state to see if your retirement accounts may be at risk. It can influence how much umbrella coverage you may want to have.
I carry more auto liability coverage than is required (habit from past when I leased cars) and I am wondering if it would be better to carry standard coverages and have an umbrella policy instead as it would also cover other things.
One thing I know is that most umbrella policies are going to require you to carry a certain level of auto insurance. I don't currently own a car but still have to carry an auto policy with high limits to meet the requirements for my umbrella policy. This stuff is always way more complicated than it needs to be!
@@sharonwinsmith curious auto policy, with no auto I wonder how they could assess risk. My stepson passed away in 2000, as executor, I did my best to discover his various accounts and manage them. He did everything online, so no paper trail. I learned of his umbrella policy when they sent a letter than they weren't going to renew it as he was deceased. It wasn't expensive, $100/yr as I recall. He was an insurance attorney so I assume that he saw value in having the policy but we had never discussed it. Your video filled in some of the blanks as to why.
@Sharon Winsmith: Someone told me that when you're shopping for car insurance, all insurance companies can see what you are paying. Is that true? That doesn't seem fair.
Great video! Please stop pointing out your perceived flaws! In the first couple minutes you flagged your (unnoticeable) accent as well as your umbrella image (which was fine!)!
I understand umbrella policies. I've had an umbrella policy for 6 years. If I did not have this background, I would have found your explanation a little difficult to follow. Talking in generalities does not sink in easily. It would be helpful if you'd explain a specific situation using typical numbers. Most people are not well versed on insurance lingo.
If you don’t mind may I ask why you don’t own a car? Only asking to see if your reasoning may benefit me im a truck driver and was thinking about getting rid of mine.
I live in NYC and don't need a car to get around. Recently sold my vacation home as I have a young son so I just have no need for a car at this point in my life.
This video just popped in my YT feed…. Funny your about text says you’ll never talk about Dave Ramsey and Suze Orman - also funny you lump them together since the latter is almost a crook (snake oil salesman) and former is the only “expert” on the planet who believes a 10% withdrawal rate in retirement is safely sustainable. I was well acquainted with the General Counsel at our medium large sized company… after finishing up a business item, he asked, “Bob(?), do you have an umbrella insurance policy? They’re cheap, even for a $1 or 2 mil policy.” Best casual advice I got from him. One thing - your insurance company will likely require you to bump up some of the coverage limits on your underlying auto and home owner policies to the level where the umbrella policy picks up from there.
I’m an agent, and it’s always a pleasure to listen to explanations 👍
Thanks for watching!
I would never notice you said those two words funny (????). Sounds quite normal to me.
Great content on your channel. Very valuable. Since we're on the topic of wealth preservation and protection. I think a video series on divorce would helpful to those that don't understand that divorce proceedings are a lawsuit and marriage is the ultimate busines contract. A contract that most get nto without a attorney, but need one or more to get out of. The ones that haven't been destroyed by it don't realize how family law operates in it's own realm with no oversight and court orders are only as good as the judge, with judicial immunity, tjat will or will not enforce it. A common misunderstanding is that prenuptial agreements provide protection. The road is littered with so many individuals who toiled to protect their generational wealth only to end up broke, broken, and indentured while attorneys and other parties extracted their wealth from them and their children. So many have ideas on what they think should happen, what's "just" and that they know how to protect their family only to learn it operates by a separate set of rules. Your take on how to prepare for what has a 50 percent chance of happening to married couples by the 15th year would be really helpful.
Thanks for doing what you do!
Thank You for pronouncing primer correctly. I didn't hear any problems with umbrella or insurance either.
Appreciate your kind words 😁
This answered my questions, thank you so much for the detailed information!
Thanks for watching!
I've just watched 4 different videos on landlord insurance and yours was the best! Thank you so much ma'am!
Umbrellas often expand coverage in addition to provided expanded coverage limits.
A big advantage of an umbrella policy is it provides first rate legal protection if you are sued. With a large policy the insurers are more likly to defend their interest in the umbrella by providing robust legal protection.
👍
Very well done I will share this with a number of people that need the umbrella😊
I neglected to mention that the cost of my umbrella policy I am able to deduct from my taxes before I pay taxes every year😊
Thank you! 😁
What about with the DEQ how do I be assured that I've got coverage and if I'm insuring with two different companies through the same agent Allstate and the agent that she represents what are the questions that I need to look at and make sure of thank you very much
General Insurance Methodology - my dad always said, “I only insure things that I cannot afford to replace.”
So while he had homeowner’s insurance and business insurance, he never paid a dime for auto collision insurance. Only one of his vehicles got totaled and it was so egregiously the other driver’s fault that they paid for it. Definitely was a net positive choice for him, financially.
While I do carry auto collision coverage even though I can afford to replace our vehicles, I use the same “only insure what you cannot afford to replace to deductibles. That means most of our deductibles are the highest possible. (You do have to price out different levels though to evaluate the premium cost.)
High deductibles also make sense because, if you’re smart, you don’t make insurance claims unless they are expensive replacements/repairs… to protect your rating. Even small claims kill your future rate. And any claim against your home gets tagged to both you and the home. Too many claims against a home can make it sale-proof because the next owner gets shocked by their quote.
The point on the auto accident is good. Someone pointed out to me many years ago it's not just covering your vehicle. What if you hit one (or multiple, as you pointed out) very expensive vehicle(s)? The costs will add up quickly.
Very helpful. Thank you.
Thank you for watching!
Sharon, aren't umbrella policies "lawyer bait"? If I have assets worth $2 million and a $2 million umbrella policy...isn't a judgement likely to go up to $4 million should I be found guilty of negligence? I have a budy who is an "ambulance chaser" (my term). He says he loves defendants who have umbrella policies because juries award much higher amounts knowing it's all covered by insurance. Wouldn't it be money better spent keeping assets overseas?
I was wondering the exact same thing. It seems like you can always lose your assets no matter what your umbrella/liability insurance is - if the judgement is high enough, it seems like you lose.
True
The policy protects your personal net worth.
@DavidDarakjy ...David, we understand the purpose. The question is whether having the higher coverage will cause a jury to award a higher settlement since it's "insured".
From my litigator friends that is entirely possible. But when your insurance company only has $30k to lose they don’t make much of an effort to defend you, even when it’s clear the case is a scam. When you have a $10MM policy they will spend millions trying to win the case. This is one of those situations where i look at the $1,800 premium and compare it to the dozens of other ways i waste money on silly things. Right or wrong, it lets me sleep better at night.
I recently asked my broker about specific types of scenarios and if I would be covered (for business) and it felt like I was talking to a 7year old…he had very little concept about the simple scenarios I was explaining. Do you have any advice on how to search for brokers or is it possible to work directly with an insurance company?
I have never found an insurance broker who was able to even come close to understanding my business and the risks I face. I have tried working directly with the insurance company in the past but they won't answer any questions about the policy and usually just try to refer you back to a broker. I don't have a great solution on this topic - it is probably the biggest issue I face with my business. I've spent countless hours reading books, studying the insurance industry, and just tried to figure this out myself. I've been exploring doing a captive insurance company but haven't set this up for myself yet.
@@sharonwinsmith thanks for the response, thanks for bringing this back to my attention as it’s something I need to look into. Why is it that “broker” can be described as “unnecessary middle man”?!
Because they add costs to the system without adding any value
Thanks, we need this.
Thanks for watching!
When calculating my net worth for determining my umbrella limits, can I ignite the balances in employee sponsored 401k plans due to ERISA protection?
The only part I don't understand is the correlation between your net worth and how much insurance you should carry. Isn't the idea to carry enough insurance so the plaintiff can't get to any of your money? Whether you're worth $500k or $2M, why not just carry a $2M umbrella, they're not very expensive. Thanks
I think on your facts, you would always carry at least a $2M umbrella. There are two issues that come up with deciding about how much coverage to carry - 1. you can be sued for future earnings sometimes too. So even if you have $2M today, the judgment could exceed that. Stated otherwise, the judgment could exceed your current net worth and you be required to pay that out of future earnings. 2. What to do when you have net worth of $5M+. Say someone has net worth of $20M, how much coverage do they need? That's a hotly debated issue. Cost and availability of coverage at higher amounts isn't the same as when you're just talking about a $2M policy.
Federal law protects 401k accounts and pensions from judgements, and IRAs/Roth IRAs up to $1M, but state laws may or may not give higher levels of protection. Best to check with your state to see if your retirement accounts may be at risk. It can influence how much umbrella coverage you may want to have.
What happens if you are in a car accident and your car insurance refuses to pay anything for whatever reason?...
I carry more auto liability coverage than is required (habit from past when I leased cars) and I am wondering if it would be better to carry standard coverages and have an umbrella policy instead as it would also cover other things.
One thing I know is that most umbrella policies are going to require you to carry a certain level of auto insurance. I don't currently own a car but still have to carry an auto policy with high limits to meet the requirements for my umbrella policy. This stuff is always way more complicated than it needs to be!
@@sharonwinsmith curious auto policy, with no auto I wonder how they could assess risk. My stepson passed away in 2000, as executor, I did my best to discover his various accounts and manage them. He did everything online, so no paper trail. I learned of his umbrella policy when they sent a letter than they weren't going to renew it as he was deceased. It wasn't expensive, $100/yr as I recall. He was an insurance attorney so I assume that he saw value in having the policy but we had never discussed it. Your video filled in some of the blanks as to why.
@Sharon Winsmith: Someone told me that when you're shopping for car insurance, all insurance companies can see what you are paying. Is that true? That doesn't seem fair.
In the beginning you mentioned having wealth. What if I can't risk loosing a dollar more than insurance costs?
Great video! Please stop pointing out your perceived flaws! In the first couple minutes you flagged your (unnoticeable) accent as well as your umbrella image (which was fine!)!
Really appreciate your kind words! 😀
Are IRAs and pensions at risk?
I understand umbrella policies. I've had an umbrella policy for 6 years. If I did not have this background, I would have found your explanation a little difficult to follow. Talking in generalities does not sink in easily. It would be helpful if you'd explain a specific situation using typical numbers. Most people are not well versed on insurance lingo.
If you don’t mind may I ask why you don’t own a car? Only asking to see if your reasoning may benefit me im a truck driver and was thinking about getting rid of mine.
I live in NYC and don't need a car to get around. Recently sold my vacation home as I have a young son so I just have no need for a car at this point in my life.
Your pronunciation of umbrella insurance sounds normal to me.
This video just popped in my YT feed…. Funny your about text says you’ll never talk about Dave Ramsey and Suze Orman - also funny you lump them together since the latter is almost a crook (snake oil salesman) and former is the only “expert” on the planet who believes a 10% withdrawal rate in retirement is safely sustainable.
I was well acquainted with the General Counsel at our medium large sized company… after finishing up a business item, he asked, “Bob(?), do you have an umbrella insurance policy? They’re cheap, even for a $1 or 2 mil policy.” Best casual advice I got from him.
One thing - your insurance company will likely require you to bump up some of the coverage limits on your underlying auto and home owner policies to the level where the umbrella policy picks up from there.
So if you're poor, all you need is an umbrella without policy.