Liability Insurance..How Much $

[psneeld]

Florida sounds like it is hurting you on thar $2600. Live north of Jax until after hurricane season and you could easily knock almost a grand off that.

[Bigfish]

Hmmm

[Group9]

Originally Posted by tiltrider1

The problem with liability insurance is you don’t know what you will be parked next to. We have a situation here we’re an old boat with the required $300,000 liability insurance was parked next to a new $2,000,000 boat. The old boat caught fire and burned the new boat. Insurance company is now going after old boat owners assets including their home.

Yikes! We have one boat in our marina that the owner paid $7,000,000 for. I know the boats next to him don't have that much liability insurance (I don't either.).

[Bay Pelican]

From experience if the old boat owner had had more than the required $300,000 insurance, say a $1,000,000 umbrella, the damaged boat owner's insurance company would have accepted the full insurance amount and not have gone after the old boat owner's personal assets. The old boat owner did save himself perhaps $150 in premiums by not having an umbrella policy.

[Group9]

Originally Posted by Bay Pelican

From experience if the old boat owner had had more than the required $300,000 insurance, say a $1,000,000 umbrella, the damaged boat owner's insurance company would have accepted the full insurance amount and not have gone after the old boat owner's personal assets. The old boat owner did save himself perhaps $150 in premiums by not having an umbrella policy.

That's fine if your boat just burns one boat down. The last marina fire in one of our local marinas resulted in one boat catching fire and burning three other boats. Imagine the fire spreading to five or ten boats. The truth is, that probably no one on this board is insured enough for worst case scenarios and boating mishaps.

What's the highest liability coverage anyone here has? We're all kind of crossing our fingers and hoping. Some are just hoping harder than others.

[Bay Pelican]

Group 9

It would be rare for an individual to have enough insurance to cover the worst case. Covering the claim is not as important as providing enough coverage so that the insurance company (ies) covering the other boat(s) damage feel that it is not in their best interest to chase the personal assets. Two factors come into play. An immediate offer of $1,300,000 (or $2,300,000) without huge legal fees is better than attempting to collect possibly an additional $500,000 from private assets but paying legal as you go along. Second as strange as it may seem there is a business reason for an insurance company not to bankrupt the individual who bought the $1,000,000 or $2,000,000 umbrella. Just not good publicity nor does it generally play well with juries.

[Group9]

Originally Posted by Bay Pelican

Second as strange as it may seem there is a business reason for an insurance company not to bankrupt the individual who bought the $1,000,000 or $2,000,000 umbrella. Just not good publicity nor does it generally play well with juries.

That may well be your experience, but my observations of insurance companies after Katrina is that their common view is that bad publicity goes away a lot quicker than a bad bottom line does.

[bayview]

Fuel spills can get very expensive very quickly.

[BandB]

Originally Posted by psneeld

My last experience with an umbrella policy, used to have one, I could not get the coverage I wanted and to switch out all the singular policies was a PIA.

Anyway, my real point is you never know what the upper number you might need really is, its just a guess.

Many people risk manage their exposure carefully and opt for lower insurance than try to hit a moving target.

You shouldn't have had to switch out any policies. It just lays on top of them, whatever they are.

You are correct that you never know the upper limit you need.

One way to look at that is not in terms of what someone might sue for. They might sue for $100 million. However, what do you think they would settle for. Most who sue for $5 million would settle for $1 million and those who sue for $10-15 million would settle for $5 million. Even those who sue for $100 million would be happy to settle for $10 million now without further litigation.

Loss of life or earning capacity or pain and suffering are the big items with no clear definition of their value.

[Bigsfish]

Check carefully the fine print in an umbrella policy, many won’t insure a boat with HP over a certain limit.

[BandB]

Originally Posted by Bigsfish

Check carefully the fine print in an umbrella policy, many won’t insure a boat with HP over a certain limit.

Check the fine print in all insurance policies.

[Robster_in_edmonds]

Wow, so much bad advice and poor thinking flowing on this thread. Start in reverse order. How much can you be sued for? Everything you have, including future earnings and potential inheritances. A broke 80-year old living on a clapped-out 50-year old wood-hulled trawler needs a lot less insurance than a recently-retired 60-year old with 2 houses, a nice boat, and $3 million in savings and investments. Your Umbrella should be your net worth rounded up to the next million. Your yacht policy should cover, at minimum, maximum EPA fine (over $800K) plus $1 million liability, with your Umbrella over that.

Just my two cents as a professional in the insurance industry.

[BandB]

Originally Posted by Robster_in_edmonds

Wow, so much bad advice and poor thinking flowing on this thread. Start in reverse order. How much can you be sued for? Everything you have, including future earnings and potential inheritances. A broke 80-year old living on a clapped-out 50-year old wood-hulled trawler needs a lot less insurance than a recently-retired 60-year old with 2 houses, a nice boat, and $3 million in savings and investments. Your Umbrella should be your net worth rounded up to the next million. Your yacht policy should cover, at minimum, maximum EPA fine (over $800K) plus $1 million liability, with your Umbrella over that.

Just my two cents as a professional in the insurance industry.

Just one thought to add. People often assume, and I've even heard of insurance agents making such a statement, that as long as you're insured for your net worth, all is fine. Well, you can be sued by a lot more than your net worth, especially if your net worth is relatively modest.

As an example. Let's say net worth is a house worth $200k, a boat worth $50k and savings and retirement of $100k. You have a $1 million policy. You're in an accident where a life is lost and based on that person's earning potential you're sued for $3 million. All efforts to settle for $1 million fail. You lose. They get the $1 million but then you're responsible for the rest.

There is no limit to your liability so don't think just because you don't have a lot, you don't have a lot to lose. 100% of what you have is a lot. 200-500% is worse.

Liability insurance and umbrella policies are relatively inexpensive for the coverage they provide, recognizing the low odds of having to pay. However, the odds mean nothing to an individual who loses all they have. If you insure, you benefit from all those who didn't have accidents. If you don't insure and have a claim against you, you get no benefit from the millions who didn't have a claim that day.

I don't know anyone who can afford to lose everything they own or will own in the future. Not rich nor poor. Every day there are hundreds of bankruptcies filed due to awards on law suits. I knew a family with a moving company that thought $10 million was enough. They had a driver driving against company policy more hours in a day than he should have and on pills to do so. He wrecked, killing five members of a family. The court awarded something like $28 million. They had to liquidate and close their business and start over.

[psneeld]

But isnt that what many are saying....you never know what enough is?

[BandB]

Originally Posted by psneeld

But isnt that what many are saying....you never know what enough is?

But you do know that some amounts are clearly not enough. Added liability coverage limits and umbrella policies are relatively inexpensive compared to other policies. You can get coverage than will cover the vast majority of claims and that 99% of claimants will settle for. You can't protect against all possible risks through insurance. Those with exceptionally high risks try to protect in other ways as well, such as ownership of assets, especially any business assets.

[Bigsfish]

And don’t forget in Florida you home is judgement proof until you sell it. Every time g I own is owned by its own entities except for the home I live in. Yeah it’s complicated but while I have liability insurance I need to further protect assets.

[psneeld]

Originally Posted by BandB

But you do know that some amounts are clearly not enough. Added liability coverage limits and umbrella policies are relatively inexpensive compared to other policies. You can get coverage than will cover the vast majority of claims and that 99% of claimants will settle for. You can't protect against all possible risks through insurance. Those with exceptionally high risks try to protect in other ways as well, such as ownership of assets, especially any business assets.

Still just a roll of the dice....of course your actions and record may help.

[Shrew]

Does anyone have an real world examples?

An example of a guy who looses his house, savings, shirt off of his back by being sued by an insurance company to cover losses beyond his insurance liability maximums?

[Bigsfish]

Shrew

Most people who may fit your example employ high priced lawyers how advise the how to avoid those consequences.

Scott. Your correct, in today’s society one never knows how much they may be sued for.

[BandB]

Originally Posted by Shrew

Does anyone have an real world examples?

An example of a guy who looses his house, savings, shirt off of his back by being sued by an insurance company to cover losses beyond his insurance liability maximums?

I gave an example earlier of an entire family and their business, but didn't lose house, savings, shirt off back. Generally, no matter how bad the event, people do not lose their house. However, I've seen people lose everything else. If not insured, they often lose their savings just in legal fees.

You want the bizarre, here it is:

Bristol, Pennsylvania thief Terrence Dickinson planned to burgle a property. In so doing, he found himself trapped in the property because the garage door, which was his exit point, didn’t work properly. He then tried a different door, which was also faulty. He found himself trapped in the property for eight days, surviving on dry dog food and Pepsi. He sued the homeowners for his mental distress and was awarded $500,000.

I have personally known a couple of people with huge individual claims against them. One was a dog bite. They had a pit bull that somehow escaped from their back yard. No understanding at all how that happened and even a belief the victim is the one who let it out. The person who was bitten was hurt badly and rushed to the hospital. The dog was quarantined, not put to sleep since no previous record. The claim ended up something like $100k actual damages from medical and loss of work and they sued for $10 million pain and suffering. A jury awarded them $4 million. Their only option was to appeal, but the insurer had paid their maximum and said any appeal the homeowner would have to pay. Only practical way was to file bankruptcy.

Another was an apartment renter. While she had gone to the gym, the hose to her washing machine came undone and flooded her apartment and two below it. She has a renter's policy with $100k liability. The complex claimed damages of 96k. One tenant below her claimed $3k. The problem was tenant number 2. They claimed $5k on an organ $2k on another piece of furniture and $20k on a hand made heirloom persian rug they'd inherited from his mother. Meanwhile the apartment gave her an eviction notice. She had only $500 in savings and the assets in her apartment plus her car. She hired a lawyer who got them all to settle under the $100k limit but she had to put a deposit and rent down on a new place and had to pay the lawyer $5k up front and ultimately another $3k. She sold her car and got a buy here pay here deal and that gave her part of it and she borrowed the rest from her employer who had a policy against such loans but did for her. We weren't talking big money here but it wiped her out and left her with over $5k of debt. She was making about $25k a year. It shattered her emotionally.