insurance question

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Stan Brown wrote:

Looks like I have my cases switched around somehow.
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Jim Patterson wrote:

I am not a big fan of insurance but your insurance company is suggesting something that is reasonable. For example our state requires proof of insurance to register/operate an automobile. The limits were set probably 20 years ago and never raised. So if you purchase a "standard" auto policy you are grossly underinsured if you have any sort of assets.
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<snip>
Trusts are useful things. They can help reduce estate taxes in some situtations; they can protect your privacy; they can help you avoid probate; they can give extra control over your assets when you die and if you're disabled.
They are not simple, they are not cheap, and they require maintenance. Expert legal adivce is required to get things right.
If you as the trust maker retain overall control of the trust (i.e., if it's a revocable trust), I don't believe that titling your assets in the name of your trust will give those assets much protection from judgments. Do you have information that contradicts this view?
*** I am not a lawyer, so this can't be legal advice. ***
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Coatzocoalcos wrote:

The insurer must "defend" the insured, at their expense. That doesn't mean the defense will be superb or even excellent.
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27 Jul 2007 07:13:29 -0000 from Jim Patterson

The word is "lien", and I would ask in misc.legal.moderated. Speaking as a non-lawyer...
I wouldn't worry about it, however. If you have a huge auto-liability case, and it's settled, it's customary to settle for the policy limits unless they're ridiculously low. Furthermore, in all or virtually all states, your primary residence is exempt from bankruptcy.

Right.

A good idea in any event. The difference in premium between $2 million coverage and $1 million coverage is likely to be far, far less than the difference between $1 million and $0.
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This is incorrect advice. First, what exactly is your definition of "ridiculously low"? A party that is seriously injured and looking at $1mil lifetime expenses isn't going to settle for $200K, if the defendent has a $200K policy, (which most people wouldn't think isn't ridiculously low), but also has another $500K in assets and a high paying job. And the fellow with the $800K house could be in that category.
Second, only a couple states had extremely generous and unlimited bankruptcy exclusions for homes. One was Texas, where you could keep your home, regardless of how much it was worth. There people used it to shield million+ ranchs. I'm not sure Texas even has that now, as it was an obvious loophole that deadbeat skunks used. The rest of the states have limits on how much equity is exempt, with around $100K being typical. The idea is to avoid making people homeless, not to allow them to shield an $800K asset from creditors.

No, first they are gonna figure what the potential total damages and award would be if they went to trial. Then they are gonna look at how much insurance the defendant has, their available assets to satisfy a judgement, and what their income stream is. Then they will make the decision. They're not gonna settle a $1mil case for $50k, if the guy has another few hundred thousand they can get.

Not just likely, it's absolutely going to be less. But amounts in those ranges are rarely addressed in an auto policy. They are usually covered in an umbrella policy that protects against high limits above your regular liability insurance in areas beyond the car as well.

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snipped-for-privacy@optonline.net wrote:

Exactly, for an eye opener anyone should have a look at:
http://info.insure.com/auto/minimum.html
Most of those limits look like they were set 30 years ago.

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On Sat, 28 Jul 2007 12:43:09 -0000, snipped-for-privacy@optonline.net wrote:

I think this view arose when dealing with the 30 percent or more of people who have very little in the way of assets, and don't make much money either. With those, they settle for the insurance amount, which I guess almost every defendant and insurance company is willing to do when the damages are really higher than that, even a little bit.
You can't squeeze blood from a turnip. But when dealing with the maybe as much as 70 percent of respondants who aren't turnips, plaintiffs use the rules you give below.

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