Thumb of Michigan | Mac46147 - 12/4/2025 05:15
Having an argument with a business partner as to if an umbrella policy is worth having. I think it is.
Anyone ever have a situation where it kicked in and saved their bacon? Or is it a waste of $$?
My simple method:
Take a sheet of paper put a line down the middle. On left side put a line somewhere below halfway and above halfway point of the paper. Below the lower line is your deductible, so you can write your deductible on the lower line. The upper line is the amount of insurance coverage you have (include your umbrella amount), so write that number on the upper line.
Now, you can begin to see a picture, you're responsible for anything below the bottom line, your insurance company is responsible for everything between the lines (he middle) and you're responsible for everything above the top line.
On the right side, draw a line where your net worth in comparison to the lines on the left side of the paper and make a decision on whether you can afford the risk off how far you line is above the left-hand side's top line.
Everyone has a different risk tolerance they will accept, and everyone has a limit to how much insurance they can afford. You can become 'insurance' poor, IMHO.
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Insurance umbrella policy
