Originally posted by Powers77:
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Originally posted by Rey HRH:
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Originally posted by Powers77:
Here is how you need to think about it assuming you have any assets to protect.
How much skin in the game do you want your insurance company to have? Minimums and you have an incident they cut the check and then you are on your own. $4 million umbrella, they are going to lawyer up and fight like hell. Cheapest insurance you can/should buy.
That would be if they go to trial and lose. But they're going to assess the situation and if it looks like your side will lose, their incentive is to not lose up to their maximum so they will settle for a fraction of their maximum risk. The settlement will cover them not pursuing the matter further.
Your insurance amount should be reflective of how much you're trying to protect, just like car insurance or life insurance.
Agree 100% that the level of the umbrella should reflect what you have to lose. My main point is that an insurance company is more likely to aggressively defend and attempt to settle on your behalf when they also have more at stake. If you have the $100,000 minimum (for example) and they know it's going to blow through that level they will cut a check and have little more to do with it. If they have the $2 million umbrella they will aggressively work the case.
Work for one of the major carriers. Monday is our monthly large loss meeting where we review those cases that have blown up and determine how they should be handled.
Many years of doing this and I'm always amazed at how some seemingly simple situation where many logical folks would not see a financial exposure can rapidly turn to crap.
