Umbrella Policy Questions

leevena

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I am a health guy and do not have a good understanding of the P&C world.

My in-laws purchased an Umbrella Policy (they owned a home/auto) a few years ago. My understanding is that an Umbrella policy provided additional coverage above auto/home.

Question # 1. Is this correct?

Also, long story short, both have passed away. Only asset remaining is the house, and with the way the market is now, we do not expect it to sell soon.

Question #2. If there is a homeowners policy (which I assume there is) do we need the Umbrella?
Thanks.
 
Re: Umbrella Policy

The umbrella policy extends the liability coverage for home/auto and other risks.

Since your parents had an umbrella, I assume they also had a reasonable amount of assets to protect, even if its just the house itself. Given the information provided, its hard to say if the umbrella really does any good or not, but the cost is probably pretty minimal, and if eligible, I would default to recommending keeping it, unless the estate assets are already distributed. The question is what is the status of the house from now till its sold?

The other option, if it's only the house, is to raise the liability limit on the homeowners policy to a $1M and call it good. This would potentially be less expensive.

Dan
 
Re: Umbrella Policy

Good suggestion.

My wife and I moved (from west coast to east coast) to care for her parents because they because they could no longer live alone. We are living in the house now, trying to sell it. We have distributed all the assets (5 brothers and sisters) except for the house (est at $230K) and a few sentimental items, but nothing else is financially significant.

Based on what you said I may just raise the homeowners, the Umbrella is $500 per year, but with just the house, who cares.

Thanks.
 
Re: Umbrella Policy

The umbrella rate sounds high. I'm not sure where you are, but the rate probably has other risks that are listed on the umbrella (i.e., autos, maybe boats, other property, etc) that can be removed to lower the premium.

That said, I don't work east coast, maybe umbrellas are more expensive there.

If the house is not vacant and does not have tenants, the risk is significantly reduced. Vacant houses are a HUGE liability risk.

Dan
 
Re: Umbrella Policy

The umbrella rate sounds high. I'm not sure where you are, but the rate probably has other risks that are listed on the umbrella (i.e., autos, maybe boats, other property, etc) that can be removed to lower the premium.

That said, I don't work east coast, maybe umbrellas are more expensive there.

If the house is not vacant and does not have tenants, the risk is significantly reduced. Vacant houses are a HUGE liability risk.

Dan

There was an auto on it, but we have purchased it from the estate after the last one died. Since we had to live with them (they could not be left alone in their house) we are continuing to live there until it sells. I agree, the empty house is a hugh liability.

Thanks,
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Another question came up. Since my in-laws have passed away, and the house will soon come out of the estate, the house will soon be in the name of 5 brothers and sisters.

How will the current (Allstate) carrier treat that situation? How do we apply for homeowners coveage since technically 5 people each own it?
 
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I'm not sure about MN, but here in PA the umbrella usually follows the auto policy. If there is no auto, I don't think there a need. You could add higher liablity limits to the homeowners.

You can get homeowners but it would be issued to the owners - the trust or list all siblings who are on the deed. I assume there is no mortgage, but if there is you may want to ask the mortgage company how they want the home covered. Any agent should be able to help you - only if the house is vacant will you have trouble but an independent agent should be able to place you competitively.
 
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