Umbrella insurance

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Umbrella insurance

Postby chocolatemuffin » Tue Aug 23, 2011 3:02 pm

I am planning to buy umbrella insurance to cover my primary residence, a rental property, and two cars. The quote I get is $279 per million. I have a few questions:

1) Does $279 per million sound reasonable? I live in a rather expensive area of California (Silicon Valley), so that probably makes a difference too.

2) I tried to get a quote from another insurance company, but that company says that since they don't insure my house and cars, they can't do our umbrella insurance. Is that the norm?

3) For the primary residence, I currently have $1 million in liability coverage. The rental property has $500k in liability coverage, and the two cars have 500k/500k liability coverage. Those are above the minimum ($300k for the houses and 250k/500k for the cars). It seems that I should drop the liability coverage on the primary policies to the minimum allowed by the umbrella insurance. Does that make sense? Any pitfalls in doing that?

Thanks in advance for your help!
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Postby Simplegift » Tue Aug 23, 2011 3:51 pm

Yes, it does seem a bit high. Here in the Pacific Northwest, we insure through SAFECO, which charges us $400 per year for a $5 million umbrella policy. I believe most companies require that you buy auto and homeowners insurance from them, before they'll sell you an umbrella policy — though there may be a few that sell it separately. And, yes, it makes good sense to coordinate all your underlying, primary policy limits with the umbrella policy minimums, as you're proposing.

This previous Boglehead thread will give you recent cost and coverage information from other Forum members:

Why does my umbrella policy cost so much?
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Postby rwwoods » Tue Aug 23, 2011 5:25 pm

Alstate underwrites my unbrella policy and I have my cars insured with them, but my home is insured elsewhere. There is no need to have basic coverage on your assets that are about the minimum amount required by the umbrella policy.
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Re: Umbrella insurance

Postby madbrain » Tue Aug 23, 2011 8:10 pm

chocolatemuffin wrote:I am planning to buy umbrella insurance to cover my primary residence, a rental property, and two cars. The quote I get is $279 per million. I have a few questions:

1) Does $279 per million sound reasonable? I live in a rather expensive area of California (Silicon Valley), so that probably makes a difference too.


Yes. I'm in Silicon Valley too and my $2 million umbrella policy through Safeco is $355/yea.
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Postby Woodshark » Wed Aug 24, 2011 7:05 am

In Georgia I pay around $175 per year for one million with State Farm.
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Postby dandan14 » Wed Aug 24, 2011 10:44 am

Paying $144 for $1M with geico.

I don't know why the region would matter. $1M is $1M -- no matter where you live. It just doesn't go as far in CA.
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Postby grabiner » Wed Aug 24, 2011 10:53 pm

dandan14 wrote:I don't know why the region would matter. $1M is $1M -- no matter where you live. It just doesn't go as far in CA.


The fact that $1M doesn't go as far in CA is part of the reason that umbrellas in CA are more expensive. If medical care and lost wages after an accident cost $500K in GA and $1M in CA, then the umbrella in CA has to pay out the extra $500K.
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Postby chocolatemuffin » Wed Aug 24, 2011 10:58 pm

Thanks for all the replies. I got my quote from Farmers and I have my primary residence and two cars with them, but the rental is with a different company. Actually, the quote is $279 for $1 million, $474 for $2 million, and $674 for $3 million. It does seem a bit expensive comparing to the other quotes that people have shared in this and the other thread.

Hmm..., I think I may just go with them for now, and then shop all the insurance in one shot when I have more time later.
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Re: Umbrella insurance

Postby sanfran2012 » Tue Mar 06, 2012 5:23 pm

im about to begin the process of purchasing an umbrella insurance plan and found this thread. .....just wanted to post on this thread in case anybody else has any info to share. thanks ahead of time.....
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Re: Umbrella insurance

Postby HardKnocker » Tue Mar 06, 2012 8:09 pm

$279 for $1 million could be high or it could be the right number. There are many variables that go into the quoted rate and they are not all dependent on you. Where I live in NJ that is a decent quote for $1 million. Probably because everyone here is highly litigious.

A previous poster said he pays $400 for $5 million which is a number I would never see in NJ in a million years.

Get some quotes from other companies. Most won't quote an umbrella without getting the whole package however so have them quote the whole thing.
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Re: Umbrella insurance

Postby benway » Tue Mar 06, 2012 8:13 pm

$1M policy with Amica. $173
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Re: Umbrella insurance

Postby Loon11 » Tue Mar 06, 2012 10:46 pm

In Virginia as well. Mine is 1m and pretty high - it really jumped when my son started driving - reason? "youthful driver - male"
around $400+. Have geico, only cars and umbrella. homeowners somewhere else.
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Re: Umbrella insurance

Postby HardKnocker » Wed Mar 07, 2012 9:00 am

Loon11 wrote:In Virginia as well. Mine is 1m and pretty high - it really jumped when my son started driving - reason? "youthful driver - male"
around $400+. Have geico, only cars and umbrella. homeowners somewhere else.


The "youthful driver" is a major factor for sure.
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Re: Umbrella insurance

Postby RabbMD » Wed Mar 07, 2012 9:05 am

Mine is $207 for 2 mil in Maryland.
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Re: Umbrella insurance

Postby Grt2bOutdoors » Wed Mar 07, 2012 9:40 am

I pay about $270 for $1 Million in New York - again, it must be related to the high propensity of litigation. Heck, I live in a town where it seems every other person is an attorney.
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Re: Umbrella insurance

Postby Rob5TCP » Wed Mar 07, 2012 10:39 am

Also NY, $328 for 2mil in the Umbrella policy.
Just got raised to $345.
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Re: Umbrella insurance

Postby fewmoreyears » Wed Mar 07, 2012 10:47 am

I wish I could be paying what you were quoted. Allstate - $3m policy - $2100/yr. In NY, 6 cars 3 drivers under 23. House and cars with Allstate
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Re: Umbrella insurance

Postby Deepsea » Wed Mar 07, 2012 2:05 pm

You guys have NOTHING to complain about.

State farm was charging me 2200, then 2900, and then 3800 for 2mil coverage. 6 cars 3 drivers, one driver under 21. Once I rasied my basic auto coverage to 1mil liability and property damage...i got state farm to reducr back to 2800. But got so fed up with umbrella rate, that I went with personal umbrella .com I have no idea if they would pay if I had a claim, but I added 1mil of uninsured motorist and 2mil umbrella for a total of about $ 1800.

All you folks wondering if $279 for 1 or 2 million of coverage......that's a BARGAIN.
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Re: Umbrella insurance

Postby FrugalInvestor » Wed Mar 07, 2012 2:12 pm

$208 for $2 million in coverage here. Our exposure is low (no dogs or kids at home, newer home, etc.) but I don't know if or how that is factored in.
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Re: Umbrella insurance

Postby scouter » Wed Mar 07, 2012 2:22 pm

I think the biggest factor in umbrella insurance premiums is whether you have drivers under 25 in your household, particularly male and unmarried. Our umbrella premiums almost tripled when our kids started driving, and I'm hoping for a similar reduction when they get out on their own in a couple years.
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Re: Umbrella insurance

Postby imgritz » Wed Mar 07, 2012 3:04 pm

I live in California. I pay $372 for a 2 million dollar umbrella at State Farm.
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Re: Umbrella insurance

Postby ddelapasse » Wed Mar 07, 2012 3:25 pm

We have TWO of those dreaded "youthful" drivers and 4 cars insured. The auto insurance is obscene, but the umbrella is $288 for 1Mil. We have Nationwide.
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Re: Umbrella insurance

Postby OAG » Wed Mar 07, 2012 5:59 pm

Teen age drivers.
Dogs or other meat biting animals.
Risky profession (Surgeon, etc.,)
I am sure that there are a lot more risk factors that will impact the cost of a U Policy.
I think we have 0 risk factors and pay $117 per year for $1 Million which when coupled with the Liability levels on the car (only one) and the residence (only one) results in a total of $1.5 Million of coverage. All policies provided by USAA.
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Re: Umbrella insurance

Postby rustymutt » Wed Mar 07, 2012 6:29 pm

Three cars, one house, one 17 year old son driving, and the 1millon umbrella policy was $269 a year.

Electric insurance company.
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Re: Umbrella insurance

Postby Saving$ » Wed Mar 07, 2012 11:07 pm

OAG wrote:Teen age drivers.
Dogs or other meat biting animals.
Risky profession (Surgeon, etc.,)
I am sure that there are a lot more risk factors that will impact the cost of a U Policy.
I think we have 0 risk factors and pay $117 per year for $1 Million which when coupled with the Liability levels on the car (only one) and the residence (only one) results in a total of $1.5 Million of coverage. All policies provided by USAA.


Other factors of which I am aware
Number of rental properties and type of rental property
Policy on allowing tenants to have pets, especially dogs
Personal driving record of primary insured under the umbrella (if you have a speeding ticket it affect your umbrella rate)
Number of boards (non profit, HOA, etc) on which you serve, especially if you are listed as an officer in the secretary of state filing
Whether or not you entertain in your home (although I think they rely upon self reporting for most of this)
Whether or not you host events in your home (fundraisers, etc.)
Whether or not the company providing the umbrella policy carries the liability for the underlying policies (auto, home, etc.)
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Re: Umbrella insurance

Postby FrugalInvestor » Wed Mar 07, 2012 11:18 pm

Saving$ wrote:Other factors of which I am aware
Number of rental properties and type of rental property
Policy on allowing tenants to have pets, especially dogs
Personal driving record of primary insured under the umbrella (if you have a speeding ticket it affect your umbrella rate)
Number of boards (non profit, HOA, etc) on which you serve, especially if you are listed as an officer in the secretary of state filing
Whether or not you entertain in your home (although I think they rely upon self reporting for most of this)
Whether or not you host events in your home (fundraisers, etc.)
Whether or not the company providing the umbrella policy carries the liability for the underlying policies (auto, home, etc.)


Funny thing is, I never recall any of these questions being asked in the first place nor has an update ever been requested (of course they would be able to check my driving record and know whether they write the underlying policies).
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Re: Umbrella insurance

Postby rogue409 » Thu Mar 08, 2012 11:29 am

FrugalInvestor wrote:
Saving$ wrote:Other factors of which I am aware
Number of rental properties and type of rental property
Policy on allowing tenants to have pets, especially dogs
Personal driving record of primary insured under the umbrella (if you have a speeding ticket it affect your umbrella rate)
Number of boards (non profit, HOA, etc) on which you serve, especially if you are listed as an officer in the secretary of state filing
Whether or not you entertain in your home (although I think they rely upon self reporting for most of this)
Whether or not you host events in your home (fundraisers, etc.)
Whether or not the company providing the umbrella policy carries the liability for the underlying policies (auto, home, etc.)


Funny thing is, I never recall any of these questions being asked in the first place nor has an update ever been requested (of course they would be able to check my driving record and know whether they write the underlying policies).


I think I've answered those questions, or similar, in original application and reissuance.
Arbella, Massachusetts, no teenage drivers, $340/yr for 2M. Minimum auto required for umbrella, but I think is around 300/300.
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Re: Umbrella insurance

Postby randomwalk » Thu Mar 08, 2012 11:54 am

Another factor for us is our swimming pool. We pay $325/year for $2 million from USAA in Georgia. Two cars but no teenage drivers.
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Re: Umbrella insurance

Postby Bungo » Thu Mar 08, 2012 12:08 pm

$540/year in San Jose for $5 million coverage. No youthful drivers in the house, currently renting but just bought a house. Will be interesting to see how that affects the premium. Got the policy via my employer (optional benefit that can be elected annually), don't recall having to answer any underwriting questions.
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Re: Umbrella insurance

Postby SamB » Thu Mar 08, 2012 12:21 pm

I am paying Safeco $536 for $4M. I have two cars and a house, which are also insured by Safeco. The liability on the house and cars is $500K, which is the deductible for the umbrella coverage. I live in the Washington DC area, which is lawsuit utopia. I priced out several companies, and selected the lowest price for the combination of coverage, house, cars, and umbrella. This is not the lowest priced umbrella coverage quoted, but the lowest price for the total coverage.
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Re: Umbrella insurance

Postby FabLab » Thu Mar 08, 2012 1:01 pm

Seems the price you have been quoted is well within bounds.

I, too, remember those questions about type/size of dog, profession, etc., per risk factors.
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Re: Umbrella insurance

Postby Quasimodo » Thu Mar 08, 2012 4:02 pm

chocolatemuffin wrote:I am planning to buy umbrella insurance to cover my primary residence, a rental property, and two cars. The quote I get is $279 per million. I have a few questions:

1) Does $279 per million sound reasonable? I live in a rather expensive area of California (Silicon Valley), so that probably makes a difference too.

2) I tried to get a quote from another insurance company, but that company says that since they don't insure my house and cars, they can't do our umbrella insurance. Is that the norm?

3) For the primary residence, I currently have $1 million in liability coverage. The rental property has $500k in liability coverage, and the two cars have 500k/500k liability coverage. Those are above the minimum ($300k for the houses and 250k/500k for the cars). It seems that I should drop the liability coverage on the primary policies to the minimum allowed by the umbrella insurance. Does that make sense? Any pitfalls in doing that?

Thanks in advance for your help!


Usually limits over $1MM are cheaper than the premium for the first $1MM. Are you possibly assuming the cost quoted was divided equally among the limits?

1) The premium doesn't sound extreme to me, and that's assuming you don't have risk factors you didn't mention that could influence the premium such as liability claims history, teenage drivers, a swimming pool, a large dog or family members with traffic violations.

2) Most companies prefer to write your homeowner's and auto coverage before they''ll offer an umbrella. It's preferable for you to have the coverages with the same company to minimize the possibility of controversy if a claim comes up. An umbrella written by a different company from your family auto and homeowner's could be a problem at the time of a large claim if the umbrella insurer could say you withheld some key information.

3) You might save a few dollars by reducing primary limits. but I'd personally feel better having the higher total limits.

My personal feeling is that it's more important to trust your insurer to be fair and financially stable than to have the lowest possible price.

My background was commercial umbrella liability underwriting. I'm not in sales. The above represents a personal opinion.

Good luck!

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Re: Umbrella insurance

Postby mptfan » Thu Mar 08, 2012 4:04 pm

I'm not concerned about umbrella insurance, if I lose my umbrella, I can just buy another one.
I eat risk for breakfast. :)
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Re: Umbrella insurance

Postby AnimalCrackers » Thu Mar 08, 2012 4:45 pm

Colorado here.

Current umbrella policy with ANPAC: $1 million coverage; $305 premium.
Policy starting this afternoon with Amica: $2 million coverage; $218 premium.

Thanks again, Bogleheads.
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Re: Umbrella insurance

Postby HardKnocker » Thu Mar 08, 2012 6:44 pm

Quasimodo wrote:My personal feeling is that it's more important to trust your insurer to be fair and financially stable than to have the lowest possible price.

My background was commercial umbrella liability underwriting. I'm not in sales. The above represents a personal opinion.

Good luck!

John


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Re: Umbrella insurance

Postby xram » Tue Apr 30, 2013 9:57 am

I need to get umbrella insurance.

Already have great disability and term life to cover my family if I kick the bucket or have a stroke etc........ :D

Anyway, do most companies require the purchaser to also have their auto or home with them as well?

My auto is with Progressive which does not offer umbrella in my state....

thanks
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Re: Umbrella insurance

Postby kenyan » Tue Apr 30, 2013 10:00 am

xram wrote:I need to get umbrella insurance.

Already have great disability and term life to cover my family if I kick the bucket or have a stroke etc........ :D

Anyway, do most companies require the purchaser to also have their auto or home with them as well?

My auto is with Progressive which does not offer umbrella in my state....

thanks
xram



Asked my auto insurer (Mercury), and they require both auto and home with them to purchase umbrella. Renters are out of luck.
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Re:

Postby ddunca1944 » Tue Apr 30, 2013 10:01 am

Simplegift wrote:Yes, it does seem a bit high. Here in the Pacific Northwest, we insure through SAFECO, which charges us $400 per year for a $5 million umbrella policy. I believe most companies require that you buy auto and homeowners insurance from them, before they'll sell you an umbrella policy — though there may be a few that sell it separately. And, yes, it makes good sense to coordinate all your underlying, primary policy limits with the umbrella policy minimums, as you're proposing.

This previous Boglehead thread will give you recent cost and coverage information from other Forum members:

Why does my umbrella policy cost so much?


Hmmmm. I'm also in the Pacific Northwest, insured with Safeco, and our premium for a 1 million umbrella policy is $271/yr.
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Re: Umbrella insurance

Postby VictoriaF » Tue Apr 30, 2013 10:07 am

Umbrella insurance? My umbrellas are self-insured {smile}.

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Re: Umbrella insurance

Postby RenoJay » Tue Apr 30, 2013 10:11 am

Sounds a bit high. I have three properties (two for me, one rental) and two cars, and a moving violation in the past three years and am paying $167 per $1 million in coverage. That said, maybe your policy includes things mine doesn't. My policy is with RLI and was less expensive than what my State Farm agent was able to get for me.
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Re: Umbrella insurance

Postby bargainhuntingking » Wed Jul 23, 2014 6:32 pm

I just bought a $1m umbrella insurance policy through Geico for $133 (in central CA). In doing so my car insurance went down $20/year, BUT I HAD to buy required minimum renter's insurance (with minimum $300K liability and I opted for only $5k replacement value contents coverage with a $500 deductible) which costs $156 a year. I own a home but am selling it, thus my homeowner's policy doesn't cover me while living in a temporary rental.

Thus umbrella + renter's - auto insurance decrease = total $269/year for a $1million umbrella policy (plus the addition auto/renter's liability coverage on those policies).

$22/month is not bad for peace of mind.
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