Liability limits

Andrew's thread reminded me of an insurance issue I've been pondering for some time now, liability limits. In Texas, you must have at least $30,000 in liability coverage for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. This basic coverage is called 30/60/25. I've carried 100/300/50 for decades, seems like that's not enough these days. I asked my Farmers agent about it, he said you're fine where you're at. With cars and trucks commonly exceeding $100,000 these days it seems like more would be better? Any thoughts on limits?

I could've sworn I was in general when I posted this. Could somebody move it please?

If you are collectible, $50k for property damage is not enough. Very easy to cause more damage than that in a multi-vehicle accident, or even a single vehicle accident, depending upon what you hit. I carry $250/$500/$250 for bodily injury/property damage, and I am comfortable with that. An umbrella policy that serves as additional liability coverage is always worth considering if you are collectible. It's not necessarily necessary (lol), but it's worth looking into.

Anyone who has a job and assets who carries less than 100/300/50 is asking for trouble, and really, 50k for PD is just not enough to make me comfortable anymore. My group gets subrogation demands every day that exceed $50k for property.

A lot of it depends on what your net worth is. The higher it is the more you have to worry about. If it's not all that much, then you really don't have a care in the world when it comes to liability.
It's all about the Benjamin's when it comes to lawyers. If you are at fault in an accident and have insurance that comes up short covering the damages, they will just settle for whatever they can get out of your insurance unless you have a net worth that is high enough to make their lawyer start salivating at the thought of getting their hands on it.
Umbrella insurance is good to have to cover claims beyond what your car and homeowners insurance cover if you have a high net worth, and generally isn't too expensive.
I'm thinking about getting it myself, however it doesn't cover what concerns me most in my situation which is aviation.
Also, my recollection from when I looked into Umbrella coverage some time ago, is that I would have to increase my automotive coverage limits. From 100/300 to 250/500 or something like that. Therefore even though the unbrella policy wasn't expensive the costs started adding up with upping my limits on my cars.
https://www.forbes.com/advisor/car-insurance/umbrella-insurance/

Thanks guys, I appreciate it. We're in the high risk group vis-à-vis assets. We're talking about daily drivers here, the convertibles rarely get out anymore. Mebbe after retirement they'll get out more? Traffic is unsane these days.

Renewal is mid May, I'll be upping it then. I drive very little, it's been a month since I filled up last, tank still shows full. She primarily just commutes, about 25 miles a day, runs her errands on the way home usually, not too much exposure. But we're senior citizens now so...

Not a charger, generally speaking, what do you think of Umbrella policies? I think they are a good idea for anyone like myself who rents property (I'm the owner) and possibly for others as well. Of course I have homeowners for property that I rent but Umbrella Policies do not seem to be extremely expensive, ranging from $200-300 yearly.

Look into asset protection holding vehicles, (trust, llc, etc) to keep those separate from your daily driver vehicles.

Umbrella policies are quite inexpensive and provide peace of mind. Anyone with any kind of assets should investigate.

Ramrod sums it up perfectly. For most people, an umbrella policy is probably more coverage than you need, but they usually are not expensive...certainly not as expensive as having less coverage than you need.

I assume the payment on 250/500//250 isn't a whole lot more than 100/300/50. I need to look into that.

We just lost a truck at work in November last year. 20 year old girl pulled out in front of the driver, just an accident at a bad intersection. The driver swerved but still hit her, lost a tire, hit the median, and spun out and rolled over chucking batteries all over the road. Her insurance could cover medical for the driver which thankfully was minimal but it couldn't touch the property. I think she had 50K and the truck alone was valued at 98K, the inventory was just under 40K. Our insurance had to take over due to State Farm's lack of communication and no sense of urgency, and then finding out they couldn't foot the bill anyways. I am sure our insurance is going after this girl and assumingly her parents to settle this deal.

Good thread, I need to call my agent!

Nope. It was about $125/year more than 100/300/100.

Wife and I have a 2 mil umbrella through this company.

I think it’s around $350 per year. It was quite easy to setup with them:

https://www.rlicorp.com/

Isn’t it true you have to have max limits on home and auto to get an umbrella?
So the “it’s only a little extra” isn’t exactly true

Not A charger:,
i wanted to thank you for your time and answers you provide to us on the board. It is very helpful to have someone in the KNOW that shoots straight from the hip

times two ! ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Not quite, but sort of. Umbrella carriers typically require you to carry a certain amount of liability insurance on your auto and home policies before they will sell you an umbrella policy. For example, a requirement might be at least $300k in liability on your homeowners, and 250/500/100 on your auto policy. So while you can't have state minimum and buy an umbrella policy, you don't necessarily have to have the highest amount of liability coverage offered on your homeowners/auto polices to be eligible to buy an umbrella policy.

Also, your umbrella policy can be from any insurer that offers one. It does not have to be the same insurer that you have your home or cars with. In fact, depending upon who you have home/cars with, your carrier may not even sell an umbrella policy.

EDIT: I just played around with the RLI website, and they even offer an umbrella if you carry 100/300/50 on your cars. Premium is a little higher than if you carry higher limits on your cars. With the 250/500/250 limits I carry, I could get a $1mil umbrella for $469/year. Mind you, I have an 18 year old driver, which will affect any premiums at all related to auto insurance/umbrella insurance.

A long time ago I tried to get an umbrella policy. I was denied because I had a racecar.

Well said! Every word is spot on!

Yes, definitely a big thanks!

One benefit worth mentioning about umbrella policies, is that if someone files a law suit against you, you get the benefit of the insurance company's lawyers that step right up and aggressively defend you. Kind of like having the best lawyers on retainer ready to defend you at any time. The premium is a small price to pay for this benefit alone.

As has been stated, lawyers are lazy and will only pursue a case with someone who has insurance.
Isn't it true that your house, car, retirement, pensions are not up for grab, AKA OJ?
So I wonder if having all this extra insurance actually makes it definite that you'll be sued.
The guy that has no insurance is that safest of all, that's why they push uninsured Motorist insurance.
Now there's a concept, let me buy insurance for everyone else and myself, because others don't have insurance?

Granted if you have tons of other "assets" then that could be a concern, but not likely.

I agree most attorneys are lazy. That isn't the whole equation though. Insurance companies have the right to and will subrogate against you if they pay out on a claim for which you are responsible. Can you declare bankruptcy to protect assests, sure. But going through all of that and putting your life in turmoil to save a buck doesn't make much sense to me.

I would bump up the coverage, especially as you pointed out the PD 50k limit. One new high end car or truck, or two more reasonably priced vehicles and you have likely exceeded that amount. Hell a new Silverado now a days can easily get to well over 70K.

Laws vary by state therefore one needs to consult an attorney and or a good financial adviser before making any assumptions.
I’m not a lawyer nor do I even play one on TV but have tried to get some understanding of financial liabilities due to my aviation activities.
It seems like a primary residence and a car are safe from just about any judgment. Pensions and social security are safe in just about every state, if not every state.
Most states consider 401Ks to be the same as pensions. On the other hand, IRAs are considered like pensions in some states but it appears like in other states that money could be ripe for picking by a lawyer in a lawsuit. Again, it’s a matter of state law and the laws vary by state.
And a car might be safe but I doubt that a collection of cars is safe, so you might get to keep one but have to sell the rest to settle a judgment.
I’ve started seeing a financial advisor and he asked for my insurance information, and mentioned umbrella coverage.
I’m sure when he finishes his review he’ll tell me I need to get that. He’ll probably also tell me I need nursing home insurance and pilot insurance. When all is said and done my whole paycheck soon will probably go to pay insurance bills.

Exactly, when you're a hammer, every problem is a nail................
I'm sure there's some insurance to cover those other insurances if they go bankrupt

The poor have it easy, they don’t know know how carefree their lives are!

This is true of your home/auto policies as well.

Not to belabor this, but the insurance company is in no way defending you.
They would throw you to the wolves if it benefited them in the slightest.
They are only "defending" themselves against paying out any settlements.

.. but there is no reason to lower your coverage limits to save yourself money, or because you think insurance companies have the wrong motives.

You need limits that are appropriate for the net worth that the insurance policy is protecting. Insurance providers know the levels that are appropriate, you call and discuss it with them and update coverages every few years as your net worth increases. Because only if you have enough coverage, will a lawsuit be settled and paid out by your insurance company. The amount of a settlement will be below the amount of your limits, which protects YOUR assets from seizure to settle a lawsuit, and that settlement is all done by your insurer's attorneys, who will fight to minimize their payout, which "benefits" the insurance company, but it's really protecting you and your assets, and making the Claimant (or Plaintiff of the lawsuit) whole again - which insurance is supposed to do.

I'd never get less coverage on a car just because I drive it less.. the coverage is about protecting your assets, not the car.



This issue just came up for me.. We have USAA insurance on everything, and an Umbrella policy with 300/500/100 limits on Personal Injury, Property Damage and Death Benefit, plus 300k uninsured.
My vintage auto insurance policy with USAA's insurance partner had limits of 300/300/2, plus 300 uninsured.

Last week USAA notified me I must have the same limits on my vintage auto insurance policies as their Umbrella. I contacted my collector car insurer and upped the limits to match our Umbrella policy.

The added cost was $11.27.
- Art

Our resident insurance expert has spoken.