Should I Have Umbrella Insurance? Featuring an Employee Spotlight on Madison DeMora

Table of Contents

• Introduction
• Why Has the Need for Umbrella Insurance Increased?
• Advice on Rising Insurance Costs
• Determining the Amount of Umbrella Coverage Needed
• Considerations for Public Figures
• Ensuring Adequate Liability Coverage
• Advising Clients on Umbrella Insurance
• Employee Spotlight: Madison DeMora
• Madison’s Journey at Yardley Wealth Management
• Madison’s Hobbies and Interests
• Accomplishments at Yardley Wealth Management
• Madison’s Role and Experiences
• Appreciation for the Team
• Closing Remarks

Introduction

Madison: Hello everyone, and welcome to Not Just Numbers Honest Conversations with a Financial Advisor and Lawyer. I am Madison Demora, and I’m here with Mike Garry. Mike is a financial advisor and a CFP and the founder and the CEO of Yardley Wealth Management. He is also an estate planning lawyer, and his law firm is Yardley Estate Planning. Hi, Mike.

Mike: Hey, Maddie.

Why Has the Need for Umbrella Insurance Increased?

Madison: All right, so today we are going to discuss an article from the Wall Street Journal, and it was titled “Big Umbrella Policies Now Harder to Get.” And that is by Veronica Daugher. So, like previous episodes, I will read a little summary of the article and ask Mike some questions. Alright, let’s get into it. The article explains that umbrella insurance, which provides extra liability coverage beyond standard car and home policies, is increasingly necessary due to rising costs and larger claims. Inflation and higher expenses for repairs, medical bills and legal settlements have led to more frequent use of umbrella policies, with a 45% increase in $1 million claims reported by USAA from 2021 to 2023. As a result, premiums have risen and it’s become harder to increase coverage limits. Financial advisors recommend having umbrella insurance equal to one’s net worth, but the needed amount may vary based on factors like lifestyle and occupation. Despite higher costs, maintaining some umbrella coverage is advised for its broad protection, including legal defense. All right, Mike, so why has the need for umbrella insurance increased over the recent years?

Mike: So first, let’s go into what umbrella insurance is. So, it is a policy that you typically have with your home and autos insurance that would cover you for amounts in excess of the underlying auto and home coverage. So standard auto and home policies might cover you for, you know, several hundred thousand dollars. And so, say your limit is $500,000 or $250,000, and you get sued for an amount over the limit, your umbrella policy would come in and kick in in that place. One of the reasons I asked you to do the research and dig into this article is, lots of people don’t have an umbrella policy, and they should. So, I really wanted to highlight the need for having an umbrella liability policy. And for most people, it’s not that hard to get and it’s not that expensive. But we’ll go into later about some of the higher limits, how that has changed. So, it is really important for people to consider an umbrella policy and for most people to get one as part of their auto and home policies and coverage. Right. Whoever your agent or broker is that you get your regular homeowners and auto with, get a policy. And we’ll talk later about what kind of limits we’d get into for you because there’s some different ideas to think about. But I really want everybody to understand how important it is. I mean, the other big thing that’s not really addressed too much is that when you get your policy, the company who underwrites the policy typically also underwrites the other coverage, like your homeowners and auto, and they will make sure that you have enough coverage in those other areas, too. And a lot of people, they get their first car. They get car insurance when they’re 16. It’s really, really expensive because teenagers get in a lot of accidents, so they get the least amount of coverage they have to under their state law. Well, and then what happens is they don’t really think about it too much other than the cost. And then fast forward to them being 25 or 40, and they all of a sudden have things of value that they didn’t have when they were 16. They had nothing but the car at that point, and they don’t think about what the coverage should be. Most people should probably have more coverage on their cars and their homes than they probably have. So, I think going through the exercise of getting an umbrella liability policy will help do that. Now, terrain in costs, you might want to have a higher deductible. Right. You don’t want to use it for everything that happens. You want to use it for big things. All right. So that’s a little bit of a rant on the need for adequate car and auto insurance and a liability umbrella. So, I’m sorry, Maddie, but could you please repeat your question to me?

Madison: Yeah. My question was why has the need for umbrella insurance increased in recent years?

Mike: Sure. I think there’s been a lot of increase in the cost of repairs, the increase in medical payments for accidents. There are increase in the cost of settlement. Everything’s more expensive than it was five years ago. All those things have gotten more expensive but regular limits on policies and umbrella policies haven’t gotten higher, right. Like that million dollar base umbrella policy, it’s still a million dollars. So, if everything else has gotten way more expensive in the last five years, it makes sense that so many claims are going above that million dollar mark now.

Advice on Rising Insurance Costs

Madison: Okay. What advice would you give people who are concerned about the rising cost of insurance, including umbrella policies?

Mike: Yeah, it stinks. Nobody wants to pay more for their insurance. But, you know, it is a fact of life. It’s part of being an adult. You need to have the coverage. You don’t want to be underinsured and have something come up, because that would be much, much worse than not, not paying your, you know, then having to pay a higher premium. So, yes, it stinks. You could shop around, you could talk to different brokers. You could try different things. Maybe affinity groups have special rates, and it might be some work. Right. To get policy that’s more cost effective for you. But, yeah, it stinks.

Determining the Amount of Umbrella Coverage Needed

Madison: So, what factors should individuals consider when determining the amount of umbrella coverage they need?

Mike: Sure. They need to consider lots of different factors. So how risky is their lifestyle? You know, are they 85 and sit in the house and watch tv in a condo that nobody’s ever around? Somebody in that situation probably doesn’t have a lot of risks. Do they have three teenage drivers in a busy city? Well, that person’s going to have a lot of risk. Most people are in the middle. And so, it’s probably more important to have that policy while you have teenager young drivers. Things that would make you want to have more coverage is if you have more assets, if you have more stuff to protect. Right. Like, if you don’t have anything and somebody sues you and they go above the limits, like, there’s nothing that they can get, but if they sue you above the limits and you have $5 million in your brokerage account, well, that might be available to the plaintiff’s lawyer. Right. So you need to think about your personal situation, both in terms of, like, assets that you have and, like, the riskiness of what your situation is.

Considerations for Public Figures

Madison: What unique considerations should public figures or individuals with high visibility take into account when purchasing umbrella insurance?

Mike: Yeah, it’s going to be harder for them because they get sued more often. And so, insurance companies want to have risks that are measurable, and they have an idea. If it’s me that nobody knows and I’m just like a normal risk, I’ll get a certain amount of coverage. But, you know, if you’re somebody out there in the public eye and, you know, you’re always making, like, defamatory statements on your podcast, which we don’t ever do, maybe there’s a higher risk. Right. And so, if you are a public figure, you need to take that into consideration. You might need to shop around a little bit more. It might be harder to get coverage, and the coverage might be more expensive. So for all our famous listeners out there. Sorry about that.

Ensuring Adequate Liability Coverage

Madison: What strategies can people use to ensure they have adequate liability coverage in today’s economic climate?

Mike: That’s a really good question, and I’m not sure I know the answer to that. I’ve talked to some insurance people over the years, and they often will say if you have a million or $2 million of coverage, that will be enough because most things just don’t cost more than that. And once the plaintiff’s lawyer, if your child gets in an accident or you get in an accident and somebody gets really hurt, once the plaintiff lawyer knows how much insurance there is, well, generally that’s going to be what they’re going to go after. A lot of financial advisors, on the other hand, will say you should have an amount equal to your net worth. You know, that may be a lot more than a million or $2 million, and the coverage might be more expensive. And whether in the state that you live in, it depends on whether your home or retirement accounts are available. So maybe they’re not part of what your net worth is for figuring out how much insurance you should get, but maybe they are, depending where you live. So, I would generally think, if you get a million or $2 million coverage on the low end and then your net worth or close to your net worth on the high end, that’s probably right. So, if you’re worth $5 million, then probably somewhere between two and $5 million is probably okay. You probably don’t need to get more than the $5 million, but I wouldn’t get less than the 2 million. It’s something to air on the side of being cautious because for, if you’re a relatively normal risk, it might only cost a few hundred dollars per million dollars. And so, coverage is getting harder for people who have had some claims. But if you haven’t had claims and you’re worth $5 million, and it would cost you $3,000 or $2,000 to have that much coverage seems to make sense. It seems to be a worthwhile investment.

Advising Clients on Umbrella Insurance

Madison: Yeah, absolutely. All righty. So, is this something that you talk to your clients about too, as well? Like I noticed in my, my summary, you know, or even in the article, it says financial advisors recommend this to their clients. Is that something you do as well?

Mike: Yes, we do. And that’s why I wanted to bring it up is because most clients that come in either don’t have it or haven’t heard of it. And so that’s why I thought it would be important to highlight this coverage because it’s much less expensive than your home and auto insurance. No one likes to pay more for insurance, but it could give you a lot of peace of mind and could really come in handy. You know, if you don’t have it, It’s easy to think of an accident costing a million dollars now, right? It’s not that hard. Cars are expensive. Health care costs are expensive. You need to be covered.

Madison: Absolutely.

Employee Spotlight: Madison DeMora

Mike: So, we’re going to change things up a little bit now. After about three dozen of these podcasts, Maddie is not going to be one asking the questions. I will be asking the questions. We’re going to turn our employee spotlight on Miss Madison Demora, our podcast producer and young lady who really helps us out with a lot of stuff in the office. I wish that we had, like, spooky Halloween music in the background, because I have some really hard questions for her, and we’ll see how she handles the questions. You know, she’s been asking me questions for a year, so we’ll see how she does with the questions. All right, Maddie, can you share a bit about your journey at Yardley Wealth Management from when you first joined to your current role?

Madison’s Journey at Yardley Wealth Management

Madison: Yes. Well, thank you for the employee spotlight, Mike. Totally appreciate it. I hope you go easy on me.

Mike: You’re welcome. It’s well earned, well deserved.

Madison: So, my journey at Yardley Wealth Management. So, I met Mike and Rachel at the country club that they’re members of. I met them a little over six years ago. And almost three years ago, Mike asked if I was looking for a job and offered me a job here at Yardley Wealth Management. Started off as an intern, and from the beginning to now, I have learned so much since being here. You know, I started off with the background work with the company, you know, helping my coworkers with tasks and getting stuff ready for meetings. And, you know, in the beginning, he mentioned to me he was interested in starting a podcast. And, you know, I had no idea how to start a podcast or anything about it, but, you know, I was up for the challenge. It took a few months to research everything, but, you know, we started the podcast, and here we are, you know, a year and four months later.

Mike: Yeah, I have to say, I have to commend you for that, because, you know, I knew nothing about it other than the fact that I thought we should do one. And so I said, Maddie, outside of your other tasks, why don’t you figure out what we need to do to do a podcast? And you did that. It’s nice that the Internet has come along and you could find out whatever you need to as long as you are smart and enough to know the right questions to ask and diligent enough to follow up. So now, a year, more than a year later, here we are. And you’ve been producing podcasts for, I know, maybe the 36th one. It’s been a lot.

Madison: Yeah.

Madison’s Hobbies and Interests

Mike: All right, so, outside of work, do you have any hobbies or activities that you’re passionate about?

Madison: Sure. Sure. So, I think the most, like, average answer for people is, you know, I like family time and friends, which I do. I totally do. You know, I like going to the gym, spending time with my family, and, you know..

Mike: Right, only a sociopath doesn’t answer like, yeah, I spend time with my family and friends.

Madison: Exactly. So, you know, I do enjoy that. Don’t get me wrong. You know, I have a beautiful niece and my nephew who are seven years old, and one is almost one years old. So that’s really fun. In my free time, honestly, I really enjoy cooking. I love finding new recipes and trying them and sharing them with friends if they’re good. I recently started getting into gardening, so, you know, I have my little garden going. I’m growing cucumbers for the first time this year, so hoping to make pickles and see how that goes. And then my boyfriend actually started his own powder coating business and sandblasting business a few months ago. So, I’ve been helping a lot with that. Lots of prep work and marketing for him. We’re still in the beginning stages of everything, but I truly enjoy everything about it. It’s really fun to watch his business grow and be able to help him with anything that he needs me to help with.

Mike: So, all right, so you like cooking. What’s your best dish?

Madison: Yeah, so this is funny, I actually talked to someone about this the other day. So, I like all kinds of recipes, so, yes, I do. I always tell people, you know, Mexican food is one of my favorite foods to cook. I’ve learned, not the whole ins and outs, but, you know, like, the authentic tacos, but Italians also are really one of my favorite ones to cook. I love making all kinds of different pasta dishes, know, vodka, rigatoni being one of them. It takes a long time to make it, but it’s definitely worth it. So, yeah, I would say those two are my main areas.

Mike: So, if you were at a restaurant somewhere and you could order anything for dessert, what would you get for dessert?

Madison: Okay. I don’t really order desserts that much, but I do love ice cream. So, bringing back in our, one of our past interviewees that we interviewed, Panna Gelateria, me and my boyfriend definitely make some trips there every once in a while. Their gelato is just amazing.

Mike: Yeah. Their gelato is particularly good. It is really good.

Madison: Yeah. So, I would have to say some kind of ice cream, gelato, for sure.

Accomplishments at Yardley Wealth Management

Mike: Okay. Is there a particular accomplishment or project you’ve worked on at Yardley Wealth Management that you’re especially proud of?

Madison: Sure. So, like I said in the beginning, I think the podcast is a project I’m especially proud of. I was obviously nervous to take on such a large project without having knowledge. Besides that, I love listening to them. I’ve always loved listening to podcasts. Probably five, six, five years. Five, six years from now. I’ve been listening to them all the time. So, I just took everything step by step when learning it. You know, I took notes on everything and just kind of took it from there. And it’s also really rewarding to listen to our first podcast, to our most recent, just to see the growth. It’s something I’m truly proud of.

Mike: Yeah, it really is. It’s a big difference from episode one to episode 35. You really have grown into that role. What’s it like having your boss on the podcast who’s never prepared for it? He just comes in, puts headphones and microphone on, and then you ask him questions. Is that tedious sometimes?

Madison: I would have to say, not really. So, I think we do a good job with communicating, you know, the kind of topics we’re interested in speaking on. And you’re very smart. You know, I feel like any question that comes your way, you will have an answer for it. So, I’m not usually worried about that. I just think the key to everything is, you know, we stay on the same page about everything. We’re very, you know, very clear on what direction we’re going in. I don’t have doubts. I really don’t. I really don’t.

Mike: That’s really smart of you to say your boss is smart on your boss’s podcast. You are a smart young lady. And I know I love self deprecating humor, but Maddie is right. It’s not like I don’t know anything about what’s going on. I generally. We communicate about what episodes will be in. We, you know, if I see something interesting or she sees something interesting, you know, we’ll file that away and then try to figure out what seems topical at the time. And so, I probably underplay my role here in this podcast, but Madison does most of the work beforehand, and, like, nothing is, none of the answers are scripted. Madison, you do take some time to figure out, like, the right questions to ask. Alright. So, what aspects of your role at Yardley Wealth Management do you find most fulfilling or rewarding?

Madison’s Role and Experiences

Madison: Sure.

Mike: And then what stinks?

Madison: All right, well, nothing stinks. We’ll start with that. So, you know, most fulfilling and rewarding. So, you know, I do help Sandra and Karen here in any way that they ever need me to help, you know, whether if it’s making sure a client received something in the mail or if they, you know, something needs to be filed, even making sure that clients and prospects are getting the appropriate marketing. That’s always good. But one of the main things that I really enjoy or that I find most fulfilling is interviewing the local businesses here in Yardley. You know, it all starts from an email or a DM to one of these businesses. And, you know, I come up with the interview questions for them and I email them back and forth for a while until we get on the Zoom call. And even after, like, interviewing them, I always have a great feeling after, you know, all these business owners are, the ones that we have interviewed, are very down to earth and truly are amazing people. And I really, really love to hear their stories and all about their business and just seeing how they started from point A and got to, you know, point Z. It’s a very rewarding part of my job.

Mike: Yeah, I like that part, too. I was walking the dogs over the weekend and listening to the podcast with Ben of Allied Cleaning, and he was great. Just like the service he provides is great. He was great on the podcast. I got some feedback from some friends who texted, said that it was one of the best ones they’d heard in the business ones. That was good. So, what do you appreciate most about being part of the Yardley Wealth Management team?

Appreciation for the Team

Madison: What do I appreciate most? So, I really appreciate my coworkers here. Definitely. From the beginning, everyone was always so welcoming, and I really enjoy getting to know everyone, especially during our little luncheons that we have here. We all get to talk about work, but also our personal lives. So, it’s nice getting to know everyone. And at the end of the day, I always appreciate the opportunity that Mike and Rachel have presented to me from the beginning. You know, it’s something that never goes underappreciated. It’s appreciated all the time.

Mike: Well, you know, I don’t know if she will actually hear this, but it was Rachel’s idea to hire you, and it was a good one. At first, I didn’t know what for, but she said, we’ll think of things, and here we are. So, it was a good idea. I’m going to apologize for not giving you any hard questions. I wanted to. I really wanted to.

Madison: Yeah, I mean, honestly, my favorite dessert kind of tripped me. I’m like, I don’t really eat dessert at restaurants all that much.

Mike: All right. So how about at home? Would you make dessert for yourself at home?

Madison: Yeah. Yeah. I do do a little bit of baking. Not super, not a lot, but I do have a recipe that I make every year around the holidays. They’re chocolate eclair cream puffs. I make everything from scratch. I usually block out, like a whole day to do them because, you know, I like to give them out as gifts or have them ready for, like, the holiday parties coming. But, yeah, that’s definitely my favorite one to make.

Mike: I have had them and I will attest to how good they are.

Madison: Thank you. Thank you. It took a while to perfect that recipe.

Mike: One or two years ago at Kim’s holiday party, I probably had a plate of them, but they were really good.

Madison: All right. Well, thanks so much, Mike.

Closing Remarks

Mike: Thank you, Maddie. Really appreciate it.

Madison: For more information on Yardley Wealth Management or Yardley Estate Planning, you could visit our website at yardleywealth.net and yardleyestate.net. You can also follow us on socials at Yardley Wealth Management. This podcast has been produced by Madison Demora and Mike Garry with technical and artistic help from Poe Productions.