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Should I keep an umbrella policy as a resident

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  • Should I keep an umbrella policy as a resident

    I have been paying for an umbrella policy for several years.  I own my home and my wife and I both own our cars.  I have no other property to speak of, no consumer debt and minimal student debt.  I have been paying the premiums (about $450/year for $1 million in liability), but this year is my last year of training and I wonder if I should drop it for the time being.  We have a few other expenses with three children right now.  Would appreciate some direction.

  • #2
    What has been the purpose of having an umbrella policy while you're at the low point of your career (earning-wise)? I agree with you that an umbrella policy is not the priority now that it will be when you are an attending.

    During an Asset Protection meeting with an established attending yesterday, I noticed that his $1M policy cost $201/year (he needs to increase coverage but that's beside the point). If you decide to keep your policy, you should shop around for one that is more competitively-priced.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      What is your net worth?  That's the big question to ask when deciding if its time for an umbrella policy in my opinion.  If its low or negative (as most residents' are), then an umbrella policy is probably not necessary.  Your malpractice insurance will be adequate until your net worth starts to climb as far as medical claims go.  But, look at your other insurance policies such as your car and home insurance.  Would they adequately protect your assets if you were to get sued after a car accident for instance?

      My net worth is only around ~300-400k, but I added an umbrella policy because we rent a room in our house out to airbnb guests.  If someone were to fall down some stairs or get injured on our property in some way, I wanted to make sure we were protected against a bad claim (especially if the guest finds out I'm a physician).

      Here's WCI's take on Umbrella insurance: https://www.whitecoatinvestor.com/umbrella-insurance/

      Also, you're paying way too much for your policy.  I have a $1 million dollar policy that is only $144/yr.  I purchase it from the same company that provides my home and car insurance policies.

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      • #4
        This makes no sense. Keep it. Or at least look for a cheaper policy.

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        • #5
          I have my 2mil umbrella policy with StateFarm and pay $280/yr. Shop around.

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          • #6
            Umbrella policies are super cheap. I see no reason why you shouldn't have one. I'll be getting my first attending job soon, and I plan on getting one later this year, despite having limited net worth. It's extra protection for $150-200 per year.

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