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When do I need umbrella insurance?

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  • When do I need umbrella insurance?

    Is there a net worth where I should consider umbrella insurance?

     

    Practice in a low malpractice state with good coverage.

     

    In additional to malpractice and business term life insurance, I have personal home owners, auto, health, term life.

     

    No disability because I have no debt and and I am primary care care with my wife also a physician.

     

    I am under 40 years of age.  Net worth just over 7 figures.

     

    I was thinking about $500k-1MM in umbrella, but I was wondering what other people decided for timing and amount of umbrella insurance.

     

     

  • #2


    I am under 40 years of age.  Net worth just over 7 figures.
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    Is there a net worth where I should consider umbrella insurance?
    Click to expand...


    yes. you are already there...

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    • #3
      You probably need at least $1MM umbrella insurance with your net worth. Umbrella covers large settlements against you over your home or auto limits. A lot of these judgments I imagine would be personal injury like if my idiot teenager decides to hit a pedestrian with their car (hospital stay, rehab, lost employment). Umbrella has no coverage against malpractice suits.

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      • #4
        Get at least a $1M umbrella policy. It should run less than $300/year. You might even consider increasing to a couple million.

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        • #5
          I agree with the others:  with your current net worth and your future earning potential (as compared to that of the "typical" American) you really need an umbrella policy now.  I'd probably spring for a 2 million dollar one.

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          • #6
            umbrella insurance is only an umbrella over your home and auto insurance, malpractice is usually separate (ie umbrella will not cover you for some huge payout).  I agree, you are late for getting umbrella insurance, all it takes is one car accident and you could lose all your assets.  You should have gotten it a while ago too because they go after your future asserts too when your current assets don't cover the award.

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            • #7
              A PUP (Personal Umbrella Policy) is dirt cheap. This is not a risk you want to take, no matter your age. As a doctor, you are a target; spend a few hundred $’s per year and get $2M, increase as your net worth goes up. It’s important for HIPs to sleep well at night - having a good PUP can take away some of that angst once you truly realize your risk and what it really means to have an “umbrella” over your property liability.

              I typically shy away from exaggerating a risk unnecessarily but one auto accident by you or your spouse or your driving age children causing paralysis, a death, or (fill in the blank) can be devastating - even if it is technically not their fault. No way to predict how a jury will interpret what happened. You are a target in these situations. Imho, this is much more likely than someone falling down the stairs at your home.

              You might consider $2M minimum and check the difference for the next $M.
              Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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              • #8
                I agree strongly with jfoxcpacfp!  We have all our physician (and other) families usually start with 2M in umbrella coverage, and those who have accumulated much wealth and/or have teenage drivers go to 5M.  Do shop around-you should not have to pay more than around $300/yr/per million dollar coverage.

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                • #9
                  Definitely get umbrella. I get $1M coverage for around $150 a year or so.

                  For a real world example, when I was a student rotating through Oklahoma, there was this awesome likable EM doc that was assistant program director of the residency program there. Every year, they threw a party at their horse farm and invited staff, residents, nurses. People would ride horses, ride ATVs (I bet you can see where this is going) and just have a good time.

                  Well one year a nurse was riding an ATV, got thrown off and broke their arm or got injured somehow. Ended up suing the EM doc hosting the party and getting money out of them. After that, the parties were a lot more tame and was a lot more selective in who got invited.

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