In short
Umbrella insurance as extra liability coverage above home/auto/renters, how coverage gaps happen via underlying minimums, what it does/doesn’t cover, who should consider it, and how to shop for it.
Key claims
Umbrella policies pay for third-party injuries/damage you cause, legal fees, and judgments; they can broaden coverage beyond underlying policies (e.g., defamation/legal fees). They only “kick in” after exhausting underlying liability limits; lowering those minimums can leave you responsible for the uncovered gap. Not covered: your own injuries, damage to your property, business liability, contract breaches, or intentional/criminal acts.
Notable examples
$800,000 car-accident judgment with $300,000 auto limits and a $1M umbrella covers the excess; Elizabeth’s $483 bar tab from $45 shots illustrates “ask prices before ordering.”
Guests
Sean Piles and Elizabeth Ayola (hosts); Caitlin Constantine (insurance nerd/insurance broker-informed guest).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOListener Question on Umbrella Insurance
0:04 to 1:13
A listener asks about the relevance and timing for getting umbrella insurance.
“What happens when your internet drops during business hours and you're the one running the business?”
Listener Question on Umbrella Insurance
1:26 to 1:49
A listener asks about the relevance and timing for getting umbrella insurance.
“You think you know a browser, But Gemini and Chrome?”
Listener Question on Umbrella Insurance
2:15 to 2:56
A listener asks about the relevance and timing for getting umbrella insurance.
“And it's raining right now, by the way, where I am.”
Understanding Umbrella Insurance
2:56 to 4:08
An expert explains what umbrella insurance is and how it works.
“To help us answer Anjali's question, we're joined by insurance nerd and a friend of the pod, Caitlin Constantine.”
Legal Protection Offered by Umbrella Insurance
4:08 to 5:24
Discusses how umbrella insurance provides legal fee coverage and broader protection.
“It doesn't pay for anything that happens to you.”
Minimum Requirements for Umbrella Insurance
5:24 to 6:43
Details the underlying minimums required for obtaining umbrella insurance.
“And maybe some people don't think that they're ever going to be in a situation where there's litigation.”
What Umbrella Insurance Does Not Cover
6:43 to 9:11
Explains the exclusions of umbrella insurance and situations where it won't apply.
“So say you've got your auto liability policy that has the 300 minimums, but you're thinking you need to save some money.”
Eligibility for Umbrella Insurance
9:11 to 10:34
Discusses who can qualify for umbrella insurance and the specific scenarios involved.
“This is not a get-out-of-jail-free card.”
Assessing the Need for Umbrella Insurance
10:34 to 14:00
Guidance on evaluating the necessity of umbrella insurance based on personal assets.
“What I did because I couldn't get an umbrella policy for my landlord policy for my house is I just increased my liability coverage on that policy as much as I could because that's the whole point.”
Understanding Umbrella Insurance
14:00 to 17:20
Learn the importance of umbrella insurance and how to evaluate its need.
“And so they price the risk a little bit lower just because of the way that it's structured.”
Show all 15 chapters
Best Practices for Shopping Umbrella Insurance
17:30 to 18:35
Discover essential tips for finding the right umbrella insurance policy.
“Lighter fabrics, better materials, pieces that just feel good the moment you put them on and look effortless.”
Best Practices for Shopping Umbrella Insurance
18:55 to 20:07
Discover essential tips for finding the right umbrella insurance policy.
“that's where most people find online therapy platforms fall short.”
A Costly Night Out: Learning from Mistakes
20:19 to 27:38
Hear a personal story about an unexpectedly expensive bar tab and the lessons learned.
“Elizabeth, before we started recording today, you told me that you have a story for me, something juicy, something that you're maybe not so proud of.”
Reflection on Financial Mistakes
27:38 to 28:01
Explore the emotional aspects of financial mistakes and self-forgiveness.
“But I had to, again, remember, like you said, we want to be perfect with our money.”
Learning from Financial Mistakes
28:01 to 30:34
Discover how to cope with financial mistakes and the lessons learned from unexpected expenses.
“This guy literally said he was just out of jail.”
Transcript
Automatic transcript. May contain errors.0:00Elizabeth Ayoola:Today's episode is sponsored by Spectrum Business. What happens when your internet drops during business hours and you're the one running the business? Say goodbye to your to-do list, unless that list involved panicking and having trouble getting any actual work done.
0:15Sean Pyles:For business owners, being connected isn't a perk. It's how you take payments, talk to clients, and keep things moving. Not to mention pretty much everything else. Spectrum Business keeps businesses connected seamlessly with fast, reliable internet and advanced Wi-Fi. plus phone, TV, and mobile services if you need them.
0:33Elizabeth Ayoola:And Spectrum Business offers 100 % U.S.-based customer support 24-7 to help you stay up and running. That means you get actual help, not submit a ticket and hope for the best.
0:44Sean Pyles:Our colleague Carrie on the social media team is a Spectrum customer, and she told us that she chose Spectrum because people online kept recommending it as a reliable and affordable option for internet and phone service.
0:54Elizabeth Ayoola:She told us she was actually a little hesitant to switch at first, since she'd been using a different service for a while. But after a year with Spectrum, she's actually had a really good experience. Her phone gets strong, reliable service, and it automatically connects to Spectrum Wi-Fi everywhere.
1:10Sean Pyles:Join the millions who rely on Spectrum Business. Visit spectrum.com slash business to learn more. One more time, that's spectrum.com slash business.
1:19Elizabeth Ayoola:Restrictions apply. Service is not available in all areas. This episode is brought to you by Google Chrome. You think you know a browser, But Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+.
1:48Sean Pyles:Imagine you're at fault in a serious car accident. The other driver's medical bills hit$800 ,000, but your auto insurance only covers$300 ,000. Who pays the rest? Potentially you. Today, we'll talk about a type of insurance that can help you in just this situation. Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
2:15Elizabeth Ayoola:And I'm Elizabeth Ayola. I know we're talking about insurance here, but I just feel like I want to go on a quick rant and say that I feel like Umbrella should have insurance too, Because I lost my umbrella last September and I refused to buy another one. And it's raining right now, by the way, where I am. So just saying.
2:31Sean Pyles:Today, you know, we're talking about umbrella insurance specifically. So we might be able to protect that umbrella of yours, Elizabeth.
2:38Elizabeth Ayoola:Thank you, because I don't want to buy another one. Our question today comes from a voicemail. Here it is. Hi, Elizabeth. My name is Anjali. And I was calling because I had a question about umbrella insurance. When it makes sense to have it, when it doesn't. and I wanted to see if you all had any advice on considering it. Okay, thanks so much. Bye-bye. To help us answer Anjali's question, we're joined by insurance nerd and a friend of the pod, Caitlin Constantine. Hey, Caitlin.
3:06Sean Pyles:Hey, guys. How's it going? Thanks for having me back on the pod. Good to have you back. And for once, we're not talking about a super grim topic, which is great. It's not climate change this time. Yay! Well, let's start by laying out some definitions because a lot of folks might not know what umbrella insurance is. And Elizabeth, I'm sorry to tell you, it might not cover your umbrellas. It's not umbrella specific insurance.
3:32Elizabeth Ayoola:Well, then I got to start a GoFundMe to get me a new umbrella then.
3:37Caitlin Constantine:Y 'all are cracking me up with these umbrella jokes, but I have to tell you that the entire time I was preparing for this segment, I kept having Rihanna's umbrella in my head. Good song. Good song. Good song. Right. So definitely more positive than talking about climate change. But to talk about what umbrella insurance actually is. So basically, it just provides extra liability coverage above what you already have for your home or auto and renter's insurance policies. Just so you understand, liability coverage is the part of your insurance policy that pays for the damage and the injuries that you cost to other people.
4:09Caitlin Constantine:It doesn't pay for anything that happens to you. It also pays for your legal fees, any sort of judgments or settlements that might be held against you. So if you find yourself in a situation where you're found liable for more money than what your insurance liability limits can cover, umbrella insurance can step in and cover the excess.
4:25Sean Pyles:Okay. And the key here is that it's an umbrella basically over your home and your auto policies. It just sits right on top there.
4:33Caitlin Constantine:Yes. They call it an umbrella because it goes over the top of your policies. In addition to that, it can often broaden your coverage as well. So it doesn't just give you higher liability limits. It gives you broader coverage.
4:44Sean Pyles:And sometimes people confuse umbrella coverage with excess liability coverage, which are two different things because basically with excess liability, you can just increase the liability coverage on a standard plan. Umbrella coverage is a separate thing, correct?
4:58Caitlin Constantine:Yes, that's exactly it. Umbrella coverage will give you higher liability limits. But a thing that's really notable about it is that it's going to give you broader coverage. And a good example of this is if you are sued for liability or defamation of some sort, your home insurance policy is probably not going to cover your legal fees. Likely won't. But an umbrella insurance policy will cover those fees.
5:17Sean Pyles:Yeah, I think that's a key point about umbrella insurance, that it can protect you from litigation, which a lot of people might not be aware of. And it's pretty cool.
5:24Elizabeth Ayoola:And maybe some people don't think that they're ever going to be in a situation where there's litigation. But we're in a life where anything can happen, right?
5:30Sean Pyles:Yeah. I mean, we are in an extremely litigious country. And I talked with my insurance broker about this, and he said that you don't have to be a millionaire to be sued like a millionaire. So umbrella insurance can help you in that case.
5:44Elizabeth Ayoola:People who have umbrella liability coverage, they need to be mindful of coverage minimums on their other policies, right? So, Caitlin, this can get a little technical. Can you explain how this works?
5:54Caitlin Constantine:So umbrella insurance policies have what are called underlying minimums. And that basically means that you're expected to carry a certain amount of liability insurance with your home, your auto, or your renter's policies before you can even buy the policy to begin with. And then you have to exhaust those coverage limits before your umbrella insurance will kick in. So to use that opening example in your intro, if you have$300 ,000 in auto liability coverage, and then you have a million-dollar umbrella policy, and you're sued for$800 ,000 after causing a car crash, your auto insurance is going to cover that first$300 ,000 of your liability limit, and then the umbrella insurance policy will kick in to cover the remaining half a million dollars of this judgment against you.
6:36Caitlin Constantine:But it's really, really important to be aware that if you lower your underlying limits below those minimums, it could result in a coverage gap. And let me explain how that works. So say you've got your auto liability policy that has the 300 minimums, but you're thinking you need to save some money. So you lower those to 200 ,000. And then you have caused your$800 ,000 accident. Your auto policy is going to cover the first 200 ,000. And then the umbrella insurance will kick in for the last half a million, but you're still going to be on the hook for that 100 ,000 that you did not cover because you were trying to save money on your premium.
7:08Caitlin Constantine:However, if you had maintained that minimum amount, the whole amount would be covered. Does that make sense? Yeah, so there's no cutting corners is what you're saying, Caitlin.
7:17Sean Pyles:Nope. No, if you think about that umbrella going over your home and your car, the minimums are what's keeping it propped up properly. Otherwise it's gonna fall over and won't cover you at all, or it'll partially cover you. And I'll also add a good insurance broker won't let you not hit your underlying minimums because it's in their best interest to have you covered properly.
7:36Caitlin Constantine:Absolutely. I think that if you are going to start engaging, if you're gonna start working with like an umbrella policy, talk to your insurer, talk to your agents. They're going to be able to help you figure out the best way to piece things together. We do this frequently with our insurer and they help us figure out the best way to cover for our needs. So a good broker, a good agent should be able to help you and should be able to prevent you from doing this. But there are some times where people make their own choices for themselves and they manage things. And sometimes these are things that they're just not aware of as a potential risk.
8:05Sean Pyles:And it kind of defeats the whole point if you don't have the underlying minimums, right?
8:08Caitlin Constantine:Yeah. The idea is that the The insurer wants you to have some degree of responsibility, like that you are doing your part to make sure that you are being a responsible person, financially responsible. They don't want to have you kind of coming in and relying on them to do things that you should have been doing for yourself, basically.
8:27Elizabeth Ayoola:Yeah. Part of being responsible, part of doing your due diligence is also knowing what's not covered with umbrella insurance. So, Caitlin, tell us what it doesn't cover.
8:35Caitlin Constantine:First of all, just have to remember that this is about liability insurance. That is about injuries and damage that you cause to other people, not stuff that happens to you. So if you're injured, it's not going to cover your injuries. That's what your health insurance is for. If your car or your home is damaged, that's not going to get covered either because that's what your home or your auto insurance is for. And it's also not going to cover any liability associated with your business. If you have a business, you have to get separate liability insurance for that. And if you breach a contract, it's not going to apply.
9:02Caitlin Constantine:And then finally, you always have to say this because it's amazing how many people don't seem to think this is real. it doesn't apply if you commit a crime or if you purposefully harm somebody. These are big no-nos in the world of insurance.
9:13Sean Pyles:Yeah. This is not a get-out-of-jail-free card.
9:15Elizabeth Ayoola:I don't want to believe that people think umbrella insurance is going to cover that. Insurance fraud happens.
9:21Sean Pyles:Yes, that's it. That's called insurance fraud. Okay. Well, let's talk about who can actually get umbrella insurance and who maybe isn't eligible.
9:29Caitlin Constantine:Yeah, so you can get umbrella insurance if you have auto, home, or renter's insurance that meets those underlying minimums that we talked about earlier. Those underlying minimums are going to vary from insurer to insurer, so I can't come and say you have to have this certain amount. You will want to check with the insurer. And also I want to make a note that if you have a boat or RV or motorcycle policy, the umbrella policy can be written to cover those as well.
9:51Sean Pyles:And an important distinction here that I learned recently is that umbrella insurance is for homeowners policies for homes, not for landlord policies. Because when I became a landlord and started renting out my house, I had to drop my umbrella policy, at least through my insurer. Now, I talked to my broker and he said that some insurance companies might offer this for landlord policies, but you have to shop around and make sure that's actually the case. For me, at this point, I don't have my coverage and it makes me a little mad, I'll say.
10:20Caitlin Constantine:You got to know your needs. I have been studying for my licensing exam for insurance and it can get very specific. These are legal contracts. They're written to be very clear and very specific so that if you have to go to court, they can point to things. And so that means that people who are in situations like you where you're a landlord, you're going to have very specific policies that are not necessarily going to be applicable to those of us who are just homeowners or renters or, you know, private citizens.
10:44Sean Pyles:What I did because I couldn't get an umbrella policy for my landlord policy for my house is I just increased my liability coverage on that policy as much as I could because that's the whole point.
Read the full transcript
10:53Caitlin Constantine:Good for you for being a responsible landlord and insurance client.
10:56Sean Pyles:Thank you. I try. I really I'm knocking on wood here. I would love to not be sued. That's my bottom line.
11:02Caitlin Constantine:Well, that's the whole point of this is to not get sued. Right.
11:05Sean Pyles:Right. Or if you do get sued, yeah, toss it over to your insurance company.
11:09Elizabeth Ayoola:And let's not talk about the hoops that you have to jump through to even get the coverage. But anyways, Caitlin, to be clear for people like Sean and Sean situation who aren't eligible for umbrella insurance, what are the options do they have? Like, can I just say, hey, I'm just going to increase my liability coverage to maybe meet the gap.
11:27Caitlin Constantine:Yeah, you can do exactly what Sean did. Talk to your broker, talk to your insurance agent and say, I want to get more liability coverage, and they'll work with you to find the right amount.
11:35Sean Pyles:I was pouring through some Reddit threads about umbrella insurance, and there were a lot of folks out there who seemed to think that umbrella insurance is just for rich people and that regular people may not need it. But I kind of disagree with that because, again, like we've said, anyone can be sued. So what are your thoughts on this, Caitlin, is it just for rich people? And also, when might it make sense to not have umbrella insurance?
11:57Caitlin Constantine:Well, so first of all, I don't think everyone has to have it, but I agree with you that like regular non-rich people, plenty of us could benefit from it. So if you have like a lot of assets and you're in a position to be sued, you should really consider umbrella insurance. And when I say in a position to be sued, I want you to think broadly about it, right? Like, are you on the board of a nonprofit? Do you own a trampoline? Do you own a swimming pool? Do you post reviews of products and businesses on the internet? People have been sued for this before. Are you a public figure? Is there a teenage driver in your house?
12:27Caitlin Constantine:Like these are all things that can lead to lawsuits that people may not necessarily think about. And these lawsuits can have very high judgments. And so if you have a risk factor that you think opens you up to potentially having a lawsuit filed against you, give a serious consideration to buying an umbrella insurance policy. So here's an easy way to decide if you need one. First, add up the value of your property, your savings, and your investment accounts. And then look at how much liability insurance you have on your existing policies. If you have more assets than liability coverage, you should probably get yourself an umbrella insurance policy.
12:58Caitlin Constantine:Now, here's the good news. You can usually get a million dollars worth of coverage for between$200 and$300 a year. There tends to be a misconception that umbrella insurance is more expensive than it is, and it's actually, I would say, relatively affordable for what you're getting out of it.
13:11Sean Pyles:You could spend maybe 20-something dollars a month and be covered up to a million dollars for a year. Yep. And when it comes to insurance generally, the less likely the bad thing is to happen, like it's actually not super likely that you'll be sued for a million dollars, the cheaper your insurance is going to be on the whole. So that's part of why umbrella insurance tends to be pretty affordable because it's not every day that you're sued for a million bucks. But if it happens, you'll really want to have that coverage.
13:34Caitlin Constantine:That's a really great point that the less common something a risk is, the less it's going to actually cost. And another thing about why umbrella insurance is relatively affordable for an insurance policy is that you should have other insurance covering it. And so they're counting on that insurance being able to cover the majority of what you need. This is something that will show up if you end up with like a lawsuit with like a hefty verdict or something. So, yes, your point exactly. It's not something that happens every day. And so they price the risk a little bit lower just because of the way that it's structured.
14:04Caitlin Constantine:Don't assume that it's out of your price range. If you think that this is something that you could benefit from, look into it. You might be surprised to find how affordable it is.
14:12Elizabeth Ayoola:As much as insurance is not the most exciting topic to talk about, I always love the conversations around the risk assessment. What is the likelihood XYZ is going to happen? And is it worth me paying$20,$40 a month? But Caitlin, when you really put it like, do you have the amount to cover the gap between what your insurance covers and what the umbrella or lawsuit could potentially cover? I think that is such a strong case for potentially just getting the insurance because how many people have, I don't know, 500K in investments or 800K in investments or a million dollars? Not many.
14:45Caitlin Constantine:When you kind of do the cost benefit analysis, when you look at what you're spending in a premium versus what you could potentially get and what you stand to lose should the worst happen, to me, I think that insurance, when it works properly, is a very key and important part of any financial setup. You need to protect your assets from bad things happening. And this is one way to do that.
15:04Elizabeth Ayoola:Thank you for saying when it works properly. Now, let's talk about shopping around for umbrella insurance for the new disciples that we have converted. What are the best practices here, Caitlin?
15:17Caitlin Constantine:So for those of you who are new to the Church of Umbrella Insurance, keep these questions in mind when you are shopping around. So first, you want to find out exactly what is covered in that umbrella insurance policy. So for instance, like say you and your family really like boating, right? You might not want an umbrella insurance policy that has exclusions around watercraft. Say you travel a lot. You're probably not going to want an umbrella policy that has exclusions around when you're abroad, which some do. So you've got to make sure that the policy actually works for your lifestyle, your needs, makes sense for you.
15:48Caitlin Constantine:You would hate to find yourself in a situation where, you know, you could have avoided this a little bit earlier just by doing your due diligence. Also find out the underlying minimums for the umbrella insurance policy so that you can make sure that you do have enough. And then you'll need to consider how much coverage you'll need to buy. So most of us would probably be fine with one to two million dollars in umbrella coverage, but many insurers will offer up to five or ten million dollars. And then once you have a sense of what you need, start collecting quotes. Start with the people who are providing, the insurer that provides your home, your renters, or your auto policy.
16:17Caitlin Constantine:But make a point to get quotes from at least two other insurers. This is especially important if you have to raise your minimum liability limits because you might end up finding cheaper rates elsewhere. And then be aware that when you're shopping, a lot of insurers are going to require you to have all of your policies with them if they're going to sell an umbrella policy to you. This is an opportunity to ask about potential bundling discounts. If you have policies with multiple insurers and you're looking at moving them all to a single insurer, you may be able to get a decent discount that could save you quite a bit of money on your premium.
16:49Sean Pyles:Okay. Well, Caitlin, thank you so much for giving us the run through about this. And Elizabeth, it seems like this may not cover your umbrella unless it goes haywire and attacks someone. So keep that in mind as you're considering umbrella insurance.
17:02Elizabeth Ayoola:Good twist. 0.0.0 chance of happening, eh? But hey, might still be insurance.
17:07Sean Pyles:That'll be a very affordable policy for you. Yeah.
17:09Elizabeth Ayoola:Yeah. Yeah.
17:10Caitlin Constantine:Well, thanks so much for having me on. I love talking about insurance. I genuinely love talking about it. So I really appreciate y 'all having me on.
17:17Sean Pyles:And that's what makes you a nerd. Proud of it. We'll be back in a moment with more Smart Money. Stay with us.
17:27Elizabeth Ayoola:Today's episode is sponsored by Quince.
17:29Sean Pyles:Summer always makes me rethink what I'm reaching for every day. Lighter fabrics, better materials, pieces that just feel good the moment you put them on and look effortless. That's why I keep coming back to Quince. They focus on high-quality essentials. Think breathable linen, soft organic cotton, washable silk, without the luxury markup. It's that rare balance where everything feels elevated, but still easy.
17:51Elizabeth Ayoola:Quince has beautiful everyday pieces like 100 % European linen pants, dresses, and tops with style starting at$32.
18:01Sean Pyles:Their denim is soft and easy to wear, and their organic cotton sweaters are perfect for layering on cool summer nights.
18:07Elizabeth Ayoola:Everything at Quince is priced 50 % to 80 % less than similar brands.
18:12Sean Pyles:I recently picked up a pair of European linen sheets for my bed because I'm such a warm sleeper and I don't want to be sweating through my sheets all summer long. And let me tell you, I'm sleeping so nice and cozy and cool. And I just love these sheets.
18:24Elizabeth Ayoola:And I'm super excited because the pool is back open. And I recently rocked my blue one-piece bathing suit. And it is a hit, I must say.
18:34Sean Pyles:Elevate your summer wardrobe. Go to quince.com slash smart money for free shipping on your order and 365 day returns. Now available in Canada too. That's q-u-i-n-c-e dot com slash smart money for free shipping and 365 day returns. Quince.com slash smart money. Today's episode is sponsored by Rula.
18:54Elizabeth Ayoola:Finding a therapist is hard enough, but finding one who actually takes your insurance, that's where most people find online therapy platforms fall short. Many don't work with insurance at all, which means you're stuck paying the full cost out of pocket or paying for an expensive monthly subscription. Rula does things differently. They partner with over 100 insurance plans, making the average copay just$15 per session. That's real therapy from licensed professionals at a price that actually makes sense. Think about it. You use your insurance benefits to maintain your physical health, so why wouldn't you do the same for your mental health?
19:30Sean Pyles:Rula isn't just affordable. The experience is tailored around you. Other online therapy platforms might match you with the first available provider, whether or not they're the right fit. Rula considers your goals, preferences, and background to provide you with a curated list of licensed in-network therapists who are actually aligned with what you need, because they know that finding the right therapist can make all the difference.
19:50Elizabeth Ayoola:No wait lists, no frustrating back and forth. Rula makes it easy to find a mental health provider who is accepting new patients and appointments are available as soon as tomorrow. Plus, Rula sticks with you throughout your journey, checking in to make sure your care is helping you move forward. Go to rula.com slash smart money to get started today. That's R-U-L-A dot com slash smart money for quality therapy that's covered by insurance.
20:18Sean Pyles:Okay, we're back from the break and I've got my cat Argus with me now. Hey, Argus. Elizabeth, before we started recording today, you told me that you have a story for me, something juicy, something that you're maybe not so proud of. I want to hear.
20:33Elizabeth Ayoola:Oh my God. Oh my God. I'm just going to get off my chest and hopefully I can find some solidarity. If not from you, Sean.
20:39Sean Pyles:This is a judgment-free zone.
20:42Elizabeth Ayoola:If not from you, from the listeners and the viewers. Okay.
20:48Elizabeth Ayoola:So on Friday, my friend messaged me and she's like, you want to hang out? And I was like, you know what? I haven't seen her in a while. She's actually my neighbor. She lives two streets down and she has a son. Our kids go to the same school play together. So I was like, sure. I was feeling a little funky too. And I don't know about you, but sometimes when I'm feeling funky, my MO is to retreat and isolate myself. but I know that it can be better to spend a bit of time with friends and people who love you. You know, pick me up her. So anyway, she's like, let's go to this Mexican restaurant that's down the street from us.
21:15Elizabeth Ayoola:It's about literally three minutes away. Terrible food, terrible drinks. I've been there once and never again. But they have a play area for the kids. So I was like, it's okay. You know, I'll just order water or something light. Get on with it. But hey, it was Friday. So anyway, we're catching up. I'm already feeling better. Girl time is amazing. and then the bartender comes along and I am not enthused about the bartender because I already know the drinks are going to be bad and I'm like I don't want to waste my money on bad drinks she orders a drink matter of fact he had already bought her two drinks trying to fix the original drink because both of the two were bad oh no I mean what were you getting margaritas well she was asking for a margarita and he wasn't oh my god this story gets juicier keep me on track because my ADHD is going to have me going all over the place.
22:00Sean Pyles:Yeah. Yeah.
22:01Elizabeth Ayoola:Okay. So anyway, she's not really satisfied the drink, but she's tired of saying it back. So she's like, it's okay. And then, you know, she drinks the drink and I'm like, well, what should I get here? I was going to get like a water, but then I was like, well, can you really mess up a Bloody Mary that bad? So I was like, okay, you know what? I'll have a Bloody Mary. It was mid as I expected. It was just average, but that was okay. So sipped my Bloody Mary. So my friend was like, you know, I'm not going to bother ordering another drink because it's a waste of money. Let's just get a couple shots.
22:29Elizabeth Ayoola:I'm like, sounds good to me. Less calories, less calories. Let's just get some shots. So brings over the menu. What kind of tequila would you guys like? If you didn't know, I'm a tequila girly. So I was like, well, looking at the menu and I'm like, huh, there's this tequila called Azul. And it looks familiar. It looks like, or rather the name looks like a tequila I've bought in the past. So I was like, okay, this is decent, not too expensive. We can do this. the bartender is now suddenly befriending us and hovering over us talking to us for five minutes we find out that he's been a felon twice and this is his first week on the job yes and he's like i'm keeping this job to keep myself out of trouble and we're thinking he's a little unprofessional with how much he's staying with us and talking to us we would like some breathing space but we're like you know cheering him on because he's on a better path he's got a job whatever so now we finish our shots and he's like should I bring another round and we're like okay it's Friday sure fast forward we had four shots and he keeps coming back and asked if we want more shots and at the fourth one we're like okay no thank you and these were some smooth shots actually best tequila I ever had I was like wow this is you know so then another bartender comes up to us and he's like you ladies have great taste this is great so we're like well I'm like well thanks you know
23:47Sean Pyles:trying to get all of your money from you they're like okay these ladies just got paid and they're gonna spend a bunch of money at our bar because our food's not great but hey you can't mess up
23:56Elizabeth Ayoola:a bottled thing of alcohol right listen sean listen okay okay lay it on me four shots later very much not even tipsy nothing very sober the bill shots in you're sober yeah what the bill comes and we're like okay i'm like definitely not spending more than maybe 30 bucks because this is like not you know i didn't order any food this is not a high budget place or expensive place i want you to guess sean how much that bill was so you each got four shots and drinks before so that's i'm gonna say right there that's a hundred dollars that's 483 sean no 183 I could have cried
24:42Sean Pyles:That can't be right
24:43Elizabeth Ayoola:I was in disbelief I looked at that receipt Do you want to know How much each shot was? $25? $45 a shot $45? $45 $45 No wonder they loved you so much They were getting paid I was so hurt
24:58Sean Pyles:Wait, so that's not even Before the tip That's just the straight check
25:02Elizabeth Ayoola:Can we have a moment Of silence for my budget?
25:08Sean Pyles:Tess is yelling Our producer test is all a ring in the background here because this is outrageous. Wow, Elizabeth, I am so sorry. Also, sometimes we just have expensive lessons learned in life that we don't really expect to happen. Oh, my God. Wait, so you didn't even see the price of the shots. It wasn't next to.
25:31Elizabeth Ayoola:Listen, you know, I can be. I won't even buy myself an umbrella. So, you know, I'm not buying a$45 shot. OK, if I knew it was, I would have never. So now it made sense because now let me give you a bit of backstory about this Azul tequila for anybody who's listening and watching wants to go Google. By the way, a whole bottle of that is like one hundred dollars in the liquor store at the club for people who like to go to the club. I call it the club. It can be a lot, a lot more expensive. So it's a popular drink for lifestyle people. So that's where my recollection was going to. I've never tried this tequila before.
26:03Elizabeth Ayoola:I've heard about it so much though because it's always all over social media and I never wanted to try it because it was so dang on expensive and now I tried it on accident.
26:12Sean Pyles:What I'm not over is that you were at this kind of not great Mexican spot that wasn't even serving. Why did they even sell that? It was basically serving as a daycare for you and they're serving this crazy expensive alcohol just to get a bunch of money from you.
26:25Elizabeth Ayoola:Let me tell you my friend's theory. She thinks we got scammed because we left there sober by the way. Four shots and one Bloody Mary and we were sober. You should have been on the floor.
26:34Sean Pyles:At least for me, if I have four shots, I'm either going real hard that night or I'm going straight to bed.
26:39Elizabeth Ayoola:Same. So she figures that they put a fake tequila or mixed tequila or shorted us the tequila because it was smooth, but nothing was happening.
26:47Sean Pyles:And just ripped you off. Wow. Well, I guess you're never going back to that place, right?
26:53Elizabeth Ayoola:Never. And then the bartender's like, see you next time, see you next time. No, you're not. No, you're not going to see me next time.
27:00Sean Pyles:I was hurt. So, Elizabeth, what lesson are you taking from this very expensive, very sobering evening of drinking?
27:08Elizabeth Ayoola:Multi-layered. Many lessons here, but I'll just leave with three. Three. The first one is if something you're ordering doesn't have a price next to it, ask before you order. Even if it looks familiar, even if you think it's something you've ordered before, ask before you order. Be an informed consumer. That's right. Lesson number two, I felt terrible, to be honest. I felt like the time I got scammed, I felt scammed, even though it was all my fault. I felt terrible. And you feel like the fool, right? Yeah, I felt I felt really silly. But I had to, again, remember, like you said, we want to be perfect with our money.
27:43Elizabeth Ayoola:We want to budget. We want to check the prices of everything. But sometimes you make a financial mistake. Right. And it may or may not be your fault. But thankfully, at least I could pay the bill. And at least I've learned from that. And at least I'm not going to be homeless after paying$483 on shot.
28:00Sean Pyles:oh my goodness I I would be wrecked that would be the rest of my weekend I'd just be sitting in my
28:06Elizabeth Ayoola:house trying to do you think I bought anything this past I bought nothing this past weekend nothing that I didn't have to buy and the third thing is just forgive yourself when you make a financial mistake don't beat yourself up about it remember it happens to the best of us and money is a tool it's there to be spent it may not have been spent on something I wanted to spend it on
28:25Sean Pyles:but hey money is a tool so would this qualify as an emergency to dip into your emergency fund or is this coming out of your fun money fund where are you paying for this from i thought about it
28:36Elizabeth Ayoola:and since we are honest open and transparent on this podcast my fun money fund is done and that's why i was so pissed off so you know proud of you for that yeah because yeah that's that's you
28:46Sean Pyles:paying your dues for the lesson learned like it sucks that you maybe got scammed because you feel like you're the fool here but in fact if they took advantage of you that's on them not being good people. This guy literally said he was just out of jail. We're all about people making amends and correcting their mistakes and living their best life, but also give the girl a shot.
29:05Elizabeth Ayoola:I felt like I got hustled, to be honest with you. But hey, I feel like, I don't know, if I was a bartender, no, would I do that? Would I be like, oh, this is$45 a shot? I don't know if that's a norm. Would you if you were a bartender or would you just assume the person knew? I don't know. It depends on the context. I would probably assume the people know what
29:23Sean Pyles:Exactly.
29:24Elizabeth Ayoola:So it's on me.
29:25Sean Pyles:It's on me. It's on me. Or you could, yeah, next time just ask, hey, how much is the shot? Because I assume$10 a shot, maybe honestly more with inflation, but I'm not ordering shots a lot.
29:34Elizabeth Ayoola:Never in my life have I even seen a$45 shot, but lesson learned. Until now. The more you know.
29:40Sean Pyles:Next time you have a$45 shot, I better be somewhere nice.
29:43Elizabeth Ayoola:And I better go home, you know, really, really happy. Yeah.
29:47Sean Pyles:Well, thank you for being so honest, open, and vulnerable on this podcast. We're all about learning from our mistakes. And hey, at least you had some fun in the meantime, right?
29:54Elizabeth Ayoola:That was the beautiful thing about it. I actually did have a wonderful time with my friend. We had some sister time. We bonded. So in all honesty, as much as I would have loved to not pay that much, the time I spent with my friend really was invaluable. And I left feeling better and full.
30:09Sean Pyles:And there's something to be said about trauma bonding too. Because you guys both went through a harrowing experience and now you're closer together for it.
30:16Elizabeth Ayoola:Exactly. And we left going, we're not going to laugh today, but we're going to laugh about this sometime in the future.
30:22Sean Pyles:And look, now we're laughing about it.
30:24Elizabeth Ayoola:We're laughing about it. Life has gone on.
30:26Sean Pyles:I love that. I mean, I don't love it for you. I love that you learned this lesson and had a good time with your friend. I do wish you had that$400 back.
30:33Elizabeth Ayoola:I really do. I really do.
30:34Sean Pyles:All right, folks. Well, we're going to close out the tab on this episode. Remember the deal. We're here to answer your money questions. So send them to us on the Nerd Hotline. you can text us or leave a voicemail at 901-730-6373, 901-730-NERD. You can also email us at podcast at nerdwallet.com or drop a comment on Spotify or YouTube.
30:53Elizabeth Ayoola:Join us next time where we'll explore some of the juiciest personal finance posts on Reddit. Follow Smart Money on your favorite podcast app. In the meantime, that could include Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.
31:07Sean Pyles:And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
31:17Elizabeth Ayoola:This episode was produced by Tess Vigland, Hillary Georgie helped with editing. Eve Krogman edits our audio and our video. And a big thank you to NerdWallet's editors for their help.
31:26Sean Pyles:And with that said, until next time, turn to the nerds.
31:33Sean Pyles:Every Sunday we cover the latest tech news on This Week in Tech.
31:36Caitlin Constantine:Hi, this is Leo Laporte inviting you to join me. And this week's panel, Gary Rivlin, Pulitzer Prize-winning author of AI Valley. Molly White, Wikipedia editor and the creator of Web3 is going just great.
31:47Elizabeth Ayoola:And car guy Sam Abul Samet. Sam has some opinions on the brand new Ferrari Luce. Molly's mom has some opinions on Google's new search page. And Gary has some thoughts about the Pope. That and more this week on Twit. You'll find it at twit.tv and wherever you get your podcasts.
32:04Sean Pyles:Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for$15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do at mintmobile.com slash switch.
32:23Caitlin Constantine:Upfront payment of$45 for three-month plan equivalent to$15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. Default terms at mintmobile.com.
From the publisher
Learn when umbrella insurance is worth buying and what a $483 bar tab can teach you about being an informed consumer.
When does umbrella insurance actually make sense for your finances? What happens if a lawsuit leaves you on the hook for more than your home or auto policy could cover? Hosts Sean Pyles, CFP®, and Elizabeth Ayoola are joined by insurance nerd Caitlin Constantine to tackle a listener’s question about umbrella coverage: what it actually is, how it layers on top of your existing home, auto, and renters policies, what umbrella insurance won't cover, and how to figure out whether your current assets and policy limits leave you exposed.
Then, Elizabeth shares money lessons she took away after she and a friend accidentally racked up a $483 bar tab, including handling financial mistakes with grace and the secret power of forgiving yourself.
Subscribe to our podcast’s free email newsletter for bonus content and more from our hosts at https://smartmoney-nerdwallet.beehiiv.com/
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