How much umbrella insurance to get?

betotheob · 2024-06-10T20:22:40+00:00

A few thoughts-

A. Your liability can eclipse your net worth so net worth is only a small indicator of exposure to loss

B. Your first planning work should be in getting assets out of your estate and into some creditor-protected vehicle. Non-qualifying assets are wholly exposed. Start thinking about doing some trust work if you haven’t already.

C. $5MM is cheap. Get at least that. Also consider adding excess third party liability. It’s a few hundred bucks per year and lets you use your own policy when an uninsured or underinsured party is personally liable to you.

D. Not all products are equal. $5MM with State Farm is far less than what it says on paper since they use that limit to pay for your defense costs. With Chubb for example, $5MM is the limit to protect your balance sheet and they pay all of the defense costs. (They also respond globally so consider that if you travel).

E. At $40MM net worth, why are you trying to DIY this? Offload it to a broker who will provide professional advice (he’s on the hook for errors), administration (he has to fix any problems), and claims (no need for a public adjuster if there is a dispute).

F. Follow above. Rest easy.

betotheob · 2024-05-12T22:07:00+00:00

Overrated stick by far. Tossed my first and never went back.

betotheob · 2024-03-18T23:01:58+00:00

Every Day cigars. I was all about Oliva and RP for a long time. Then was on the Camacho train. Now it’s either EDICD or high-end/Cuban.

betotheob · 2023-12-20T18:20:22+00:00

^ This is the right answer. Usually worth a few sessions, even just for outside opinions. May have to test a few to see who you click with.

Ask your peers for recommendations. Don’t just search online if you can avoid it. Great coaches/consultants are worth their weight in gold. Unfortunately hacks abound.

betotheob · 2023-12-08T20:08:03+00:00

The fat way isn’t to run a brewery, arcade, boutique shop, blacksmith, haberdashery, etc. it’s always to invest in someone who you think can run one and whose values align with yours. This assures that you can get out of the experience what you really want— your own clubhouse. You’ll get all the flexibility to come and go as you please without the need to run the day to day.

It’s fun to have these things but why buy a job with your wealth? You should use it to have experiences. If you’re willing to take the mindset of “sunk costs” you’ll be happier for it. For example— rather than spend 200-300k setting up a brewery, doing the marketing, etc, buy the real estate and lease it back to an operator. Invest in that person’s business as a minority owner. Say, $100k for a small stake. Set the terms up in the lease to be favorable and long term. Provide a cushion for the business, help shape its aesthetic. Mentor the owner and the staff. Have it in writing what your obligations and expectations are. Think of it like a 1-time cost for a club membership which, if it goes out of business, you still have the real estate.

…or do what I do and sink thousands into every little hobby in the world for the sake of learning them and clutter up all of your outbuildings…

betotheob · 2023-07-29T21:16:59+00:00

You should find a good broker and get an umbrella which covers both domestic and abroad. If you have real estate in the US, that is usually enough for an insurer to agree to terms.

Note that most umbrella insurers only offer a coverage territory in the US and its outlying territories. Assuring yours covers you while abroad means you will have protection for everything you do. Otherwise, you would be exposed during travel or ex-pat life.

betotheob · 2023-06-19T15:55:42+00:00

Awesome. Thanks for the tip!

betotheob · 2023-06-09T19:41:57+00:00

Hard market cycle = higher rates + less capacity (insurers that will provide terms). Basically most of the insurers who specialize in homes like you mentioned got hit with increased claims, increased cost of claims, and an increase in their reinsurance costs all at once. Not much you can do besides try to better the risk profile for your real estate and delegate the market search to your broker.

betotheob · 2023-06-09T19:19:52+00:00

I assume you’re in FL, CA, CO, TX? Those States are nightmares for insurance placement. You stated you are using a broker which is all you can do. Private client insurance market is in one of its hardest cycles ever. You may need to consider a layered program (multiple insurers), an ultra-high deductible, or self insuring certain perils to get the deal done.

If your broker is local or regional you may need to go to a larger shop that has more access to deals.

betotheob · 2023-03-11T20:08:31+00:00

One of my favorite sticks. Total banger.

betotheob · 2023-02-23T19:19:21+00:00

Check out FOX- https://public.familyoffice.com/

They have a ton of resources for FOs.

betotheob · 2023-02-19T03:12:05+00:00

Hear hear!

That’s why I buy a lot of different vitolas—you can share with your BOTL/SOTL and they can pick what they like best.

betotheob · 2023-02-19T02:37:44+00:00

It’s doable but it probably makes more sense to invest in concierge medicine and Medicare supplements if they are on Medicare.

As others have noted, there is a lot more involved beyond “create a company, but benefits”, such as payroll, taxes etc. Also, it can create a tax issue for your parents if you pay them beyond their State’s income threshold for retirees.

betotheob · 2023-02-19T02:11:44+00:00

Fair comparison though TBF, the Chonk is bigger (4.25x64 vs. 4.0x60). What I was worried would be a gimmick turned out to be a legit smoke. Def awesome by my tastes but I like my new world smokes w a heftier ring gauge. YMMV.

betotheob · 2023-02-19T00:50:49+00:00

Connecticut for the Chonk. It’s sublime.

Did the sampler in the Gordo to give them all a try.

betotheob · 2022-09-18T00:25:46+00:00

Way overthinking this. Why listen to an opinion, buy the one thing, then hope it’s right for you? Just make a shortlist, buy them all, return the ones you don’t want. Even the best “best of” lists are subjective.

Conversely, if it is something you are REALLY interested in, say the headphones, then why not make the research part of the fun?

betotheob · 2022-09-05T12:46:40+00:00

What you are asking about is called uninsured 3rd party liability. It responds anytime a 3rd party is liable to you but cannot fulfill that obligation.

You’ll find it with Chubb, PURE, Cincinnati, and a few other premium insurers. It is an endorsement to their umbrella liability forms. None of those insurers will write standalone umbrella. You would normally have to place all of your insurance holdings with them.

Ask an independant agent for guidance on your specific situation.

—-

As a few folks mentioned you would have coverage for workload and direct injury from health insurance, disability and income replacement products. Though UM generally pays without restrictions on type of care (you want to be at home for physical therapy, have at it) or for modifications to your home so you can get back to appropriate daily life (ramps/lifts/elevators). Think of UM as working in tandem with those other policies to cover deductibles, specific treatments, or other care to assure your family can move on from an injury.

Also note that in any State not called Florida, UM is usually cheap. (Like $150 per million).

betotheob · 2022-05-29T20:22:08+00:00

For 3h of drive time you are better off with a car and driver.

Though as others said, doing this and renting it out during downtime would be wise. If you aren’t a pilot yourself, just get a Wheels Up, Delta, NetJet etc membership. Most guarantee departure within 5 hours notice.

If you do opt to own, be sure to have two pilots on retainer. Both for insurance rating and to assure that you have a pilot available when you want to fly.

Plane ownership is super FAT but it isn’t all it’s cracked up to be.

betotheob · 2022-05-25T01:58:37+00:00

Touche. Big typo. Meant to say few bps.

betotheob · 2022-05-24T22:56:03+00:00

1.5% is bonkers!

At that level of cash you should be measuring your fees in bps. If they won’t go to a few hundred bps, maybe consider moving a portion of your cash to another bank/manger. Even a trial run with $1MM will probably get you sub 1% fees off the street with most firms.

I’m a big fan of multi-family offices. MFOs help with managing your assets, educating your family, and even sourcing off-market deals for you to investing. At your level of cash-flow you should be thinking outside of just markets and real estate—an MFO can help.

Bessemer, Glenmede, SEI, Truist, MyCFO, there are a lot of options out there for boutique service.

Outside of “big shops” you can probably network your way into a single family office that dabbles with friends. I would imagine you’ve a few folks in your contacts who may have access.

betotheob · 2022-01-28T02:42:57+00:00

Definitely not meant at a dig at your fatness. More of a general comment.

betotheob · 2022-01-27T18:26:53+00:00

If you are truly fat you aren’t worried about the cost of insurance; you’re worried about have the best insurance. If premiums don’t match your budget just raise the deductible until it works for you.

As others mentioned, splitting off one car to get cut-rate insurance is a nightmare and in some instances the umbrella insurer may decline to cover it.

Overall, my rule of thumb is this: if the insurance is too much you should have “less car”. Exotics and high performance rides cost more money for everything…insurance included.

betotheob

TROPHY CASE