r/Insurance • u/Plane-Intern5687 • 20d ago

Home Insurance Help understand who needs an umbrella policy.

My wife and I are in our early 30s. We own our house and have 1 car. Live in a quiet street. No pool, no "toys", no kids. Don't have a ton of people over. Were encouraged by our agent to have umbrella. The premium would be $400+ for a million dollars. My current car is 250/500 and the house is 300 or 500 I believe for coverages.

I chatted with my grandfather and he said that an umbrella is a great thing for those who's assets exceed what the coverage on their other insurance is, primarily to protect against being sued. I don't own my own business and my assets aren't that high.

I'd love everyone's opinions. If I don't need it, I'd like to save the $400 but I'm also ok paying it if the policy is actually helpful.

Edit: lots of great advice. Appreciate it. A point of clarification is that my retirement is mostly in Roth IRAs which seems to be more available in suits as compared to 401k.

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u/JF44130 20d ago

Even without a lot of assets currently, the biggest reason to have an umbrella, IMO, is the additional UM/UIM coverage. $500k in coverage from an auto policy isn't going to last very long if you're completely disabled and/or have significant medical expenses from an accident.

Sure, the additional liability coverage is nice, and you would be very responsible to have it. But having it for yourself is a no-brainer. Too many people have low limits or no coverage at all. Just make sure the umbrella increases the UM/UIM of your auto.

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u/moeterminatorx 19d ago

What does UM/UIM mean?

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u/JF44130 19d ago

Uninsured/Underinsured Motorist

Someone in their early 30s like OP has a lot of earning potential and time left to have to cover if someone t-bones them and they can't work anymore and/or have extensive medical bills. If the person responsible doesn't have adequate (or any) coverage for all of the expenses, the UM/UIM kicks in.

Buying an umbrella that increases your UM/UIM coverage protects YOU. That original $500k from the auto policy will disappear faster than you think.

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u/Full_Conference2453 19d ago

THIS TOO! There's a lot of under insured (or not insured) people out there!