High Car Insurance VS Umbrella Insurace

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countdrak
Posts: 15
Joined: Fri Jan 13, 2017 12:47 pm

High Car Insurance VS Umbrella Insurace

Post by countdrak » Fri Feb 03, 2017 1:57 pm

I have really good coverage for my cars but my monthly insurance is almost $150/month. I have a spotless driving history, over 30+ and I was told to enroll in higher benefits in case of accidents, so I ended up with this massive monthly payment. Recently someone told me that I can dial down my car insurance and get a cheaper umbrella insurance that can cover anything that my car insurance does not cover.

Is that true, does an umbrella cover anything that my car insurance wont cover? If I can save $75-$100 a month that would be huge- not sure if I can.

Any ideas?

Jack FFR1846
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Re: High Car Insurance VS Umbrella Insurace

Post by Jack FFR1846 » Fri Feb 03, 2017 2:00 pm

Umbrella policies are going to require all vehicles to have high liability limits first. I have my policy in front of me and 250k/500k are requirements. The umbrella covers amounts above this. Remember that the umbrella is only for liability. It will have requirements on other insurance as well, such as homeowners.
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badger42
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Re: High Car Insurance VS Umbrella Insurace

Post by badger42 » Fri Feb 03, 2017 2:05 pm

It would help if you post the breakdown of your coverages.

Liability is what helps you pay others in case of accidents, and umbrella stacks on top of liability.

Collision / comprehensive fixes your car, and a higher deductible there can often save significant $$.

"Low dollar" coverages like towing and rental care are just a waste of money IMO, and should be dropped as long as you can self insure them (if you can't, why are you asking about umbrella?)

SRenaeP
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Re: High Car Insurance VS Umbrella Insurace

Post by SRenaeP » Fri Feb 03, 2017 2:22 pm

Also, consider taking a defensive driving course. This will lower your premium. The certification lasts for three years, IIRC, and is only ~$50.

-Steph

miles monroe
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Re: High Car Insurance VS Umbrella Insurace

Post by miles monroe » Fri Feb 03, 2017 2:34 pm

yes, as mentioned above need 250k liability (state farm in georgia) and a million dollar umbrella sits on top of that. $150 a year for the umbrella for me. your agent call give you the details.

countdrak
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Re: High Car Insurance VS Umbrella Insurace

Post by countdrak » Fri Feb 03, 2017 6:14 pm

This is the coverage I have for the 2 cars.

Comprehensive $1,000 Ded $1,000 Ded
Collision $1,000 Ded $1,000 Ded
Medical Payments $10,000 $10,000
PIP - Additional Death Benefit $3,000 $3,000
PIP - Coordination of Benefits WORK LOSS COORD. WORK LOSS COORD.
PIP - Exclusion Specified Coverage MED EXP EXC-INS ONLY MED EXP EXC-INS ONLY
Personal Injury Protection BASIC + 100000 BASIC + 100000
Roadside Assistance Yes Yes
Opt Limits Transportation Expense $50/$1,500 $50/$1,500
Single Limits $500,000 $500,000
Supplementary UM Single Limit $500 $500
Rental Coverage Upgrade Yes Yes
Platinum Auto Essential
Waiver of Deductible Yes Yes
Child Passenger Restraint System Replacement Yes Yes
Ultimate Towing and Labor Yes Yes
Ultimate Rental Yes Yes
Full Glass Coverage Yes Yes
OEM Parts (3yrs) Yes Yes
Mechanical Parts Replacement Yes Yes
Platinum Auto Advantage
Second Chance Accident Forgiveness Yes Yes
Deductible Dividends Earned $ 100 $ 100
New/Newer Car Replacement Yes Yes
Credits & Savings
Account Credit Yes Yes
Anti-Lock Brake Discount Yes Yes

IowaFarmBoy
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Re: High Car Insurance VS Umbrella Insurace

Post by IowaFarmBoy » Fri Feb 03, 2017 10:05 pm

What kind of cars? The value of the vehicle will make a difference in comp and collision. What state? Some states are much higher than others either because of risk profiles or state specific requirements and regulations. Those rates are higher than ours but we are in a pretty low cost state. Our rates dropped by half (with same company and coverages) when we moved from Texas to Illinois 20+ years ago. Any youths on the policies? No need to explain that....

The only coverage that an umbrella could impact directly is your single limit liability coverage but at 500k you aren't that high. As Jack said, you may be required to keep that level of coverage even if you get the umbrella. I think the cause of your perceived high rates is something other than your liability limits. It could just be that you are in a high cost area. When I look at your list of coverages, I see a lot of "platinum" and "ultimate" references and it looks like you have every possible option. These could be small upgrades that combine to a lot of money that you may want to self-insure. I'd talk through your coverages with your agent and see what is driving the cost and what you can do.

Good advice from Badger42 about self insuring the towing and rental coverage.

Iridium
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Re: High Car Insurance VS Umbrella Insurace

Post by Iridium » Sat Feb 04, 2017 12:54 am

countdrak wrote:Is that true, does an umbrella cover anything that my car insurance wont cover?
Yes, absolutely:
Kid cracks their head on your tile floor after they slip on a spill you didn't clean up? Auto obviously has nothing to do with it. Umbrella covers it.
Accidentally set fire to a hotel in France? Auto won't cover it. Even most renter's/homeowner's policies won't cover it (generally limited to US and Canada).
Post a bad review on Yelp, and the business sues you for libel? Auto and most renter's/homeowner's policies won't cover it, but the umbrella will.
Umbrellas cover almost every personal lawsuit that can be thrown your way where you didn't intend to cause harm. Are these things likely? No, of course not. Which is why you can buy $1MM of coverage for under $200 / year in most cases.
countdrak wrote:If I can save $75-$100 a month that would be huge- not sure if I can.
I would think that actually saving money with an umbrella is pretty unusual. In fact, on this forum, I see some members advocating raising the auto limit to 1 MM, rather than purchasing a 1MM umbrella, since the former is usually cheaper. Most of the time I have heard of people saving money buying an umbrella, it was because they had their homeowner's/renter's insurance with a different company, and the umbrella qualified them for a bundle discount on the auto that is worth almost as much as the umbrella's premium.

Any possible reduction in cost would be tiny: the cost difference between 500 single limit and 300 single limit (the minimum you have to carry with an umbrella) is very small.

nps
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Re: High Car Insurance VS Umbrella Insurace

Post by nps » Sat Feb 04, 2017 6:51 am

It looks like you have a lot of bells and whistles that may be costing you a lot of money. Does your insurer break out the premium cost for each? I would be suspicious of a bunch of coverages including:

PIP - Additional Death Benefit $3,000 $3,000
Platinum Auto Essential
Child Passenger Restraint System Replacement Yes Yes
Ultimate Towing and Labor Yes Yes
Ultimate Rental Yes Yes
OEM Parts (3yrs) Yes Yes
Mechanical Parts Replacement Yes Yes
Platinum Auto Advantage
Second Chance Accident Forgiveness Yes Yes
Deductible Dividends Earned $ 100 $ 100
New/Newer Car Replacement Yes Yes

Also $100,000 PIP coverage seems crazy to me unless you're running a taxi service.

camaro327
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Re: High Car Insurance VS Umbrella Insurace

Post by camaro327 » Sat Feb 04, 2017 7:16 am

It looks like you have a lot of bells and whistles that may be costing you a lot of money
Several of these look like little tag-on maintenance goodies (OEM parts, etc). Also, I would compare the cost of comp with and without full glass.

However, some states are just more expensive than others and often it is states that have PIP (no-fault) benefits (NY, NJ, MI, etc).

countdrak
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Re: High Car Insurance VS Umbrella Insurace

Post by countdrak » Sat Feb 04, 2017 8:17 am

I am in NY, no youths on the cars. This is for 06 Honda Civic & a brand new infiniti QX60. It seems that I can't save a lot by just getting an umbrella, and it won't replace the low deductible car insurance.

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Watty
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Re: High Car Insurance VS Umbrella Insurace

Post by Watty » Sat Feb 04, 2017 8:29 am

The only way that you will find out is to shop around for insurance and an policy.

If that $150 a month is for both cars and decent coverage that doesn't sound all that high to me at $75 a month per car.

jimishooch
Posts: 199
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Re: High Car Insurance VS Umbrella Insurace

Post by jimishooch » Sat Feb 04, 2017 11:41 am

GEICO saved me 26% across 4 policies: home/auto/motorcycle/umbrella.

good luck
jim

jimishooch
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Re: High Car Insurance VS Umbrella Insurace

Post by jimishooch » Sat Feb 04, 2017 12:10 pm

IMO anything more than this is a waste of money. my car is under manufacturer warranty so no roadside service. lowest daily rate on rental...all liability minimums tied to umbrella.

Bodily Injury Liability

Property Damage Liability

Personal Injury Protection

Uninsured/underinsured Motorist Bodily Injury

Uninsured/underinsured Motorist Property Damage

Comprehensive (Other Than Collision)

Collision

Rental Reimbursement

good luck
jim

afan
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Re: High Car Insurance VS Umbrella Insurace

Post by afan » Sat Feb 04, 2017 2:50 pm

Definitely shop for rates but also contact your current insurer and ask what you can do to lower the premium. A lot of that coverage is for things like rental car if you need it, newer car replacement value and such that you almost certainly need not insure at all.

You can also consider raising your deductible and see what that would do to cost.
Basically, once you get above whatever coverage your state requires, you are insuring to protect yourself against big losses. You self insure for smaller losses. Insurance companies will sell you coverage to protect against these, but since such small losses are common they charge a lot for the insurance.

When you check with your insurance company find out what the minimum liability coverage has to be for them to write umbrella on top of the auto policy. It may or may not be lower than your current liability coverage. If it is lower, then you would drop the liability in the auto policy down to whatever the insurance company required.

When I shop insurance I find that our current coverage is MUCH cheaper than any competition I have found. We have been with the company for a long time and get substantial discounts for that. We also have excellent claims records, low mileage, garaged at home, etc. But those should apply for any company. If you have been with your current insurer for a while they might give you good prices to keep you.

You can probably get a discount for doing your homeowners/renters policy with the same company.

If you cannot afford to self insure for the smaller items then you are stuck paying high premiums, but they are usually a bad deal.
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boglerdude
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Re: High Car Insurance VS Umbrella Insurace

Post by boglerdude » Sun Feb 05, 2017 2:09 am

Assume your umbrella is only excess liability and does not cover anything that your underlying policies don't cover

Read the fine print then consult with your agent

spammagnet
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Re: High Car Insurance VS Umbrella Insurace

Post by spammagnet » Sun Feb 05, 2017 10:27 am

Our recent experience, for your comparison:

We live in Florida and have a 21 yo son and 23 yo daughter on our insurance. 4 cars, 2007-2016, plus a travel trailer. Was insured for home, auto and trailer by AMICA but they wouldn't cover our new condo so we got home insurance from a different vendor. (Most fled Florida in the 90's.)

Our auto alone was >$6K/year. By dropping unnecessary collision/comprehensive on older cars, dropping unnecessary extras like rental coverage, increasing deductible on the highest value car, and comparison shopping we dropped that to $4600 with GEICO. We now have 300K/300K BI, 100K PD, 10K PIP and 300/300 uninsured, stacked. (We have road service through Good Sam because of our trailer. It covers our cars and is comparable in price to other options.)

We plan to change the uninsured to unstacked but couldn't waive stacked over the phone. When we get the forms and sign the paper, our premiums will drop further. We don't have umbrella but plan to get it. The GEICO web site says it will cost ~$500 for 1MM. The coverage described above is the minimum required to qualify for umbrella.

We got a quote from State Farm for a comparable package including homeowner and umbrella. They were significantly higher than our combined GEICO auto + SOB homeowner + future GEICO umbrella premium, so we went with GEICO. Anecdotes from friends and online reviews of GEICO customer service contributed to our decision.

Nearing retirement, we have the means to absorb the cost of deductibles, car rental, etc., if the occasion arises. If I were younger with little in my pocket, I might be more comfortable with lower deductibles even though it might cost me more in the short term. I'd raise those deductibles as I accumulated savings I could use to repair or replace a car. (Others on this forum might advise a different approach.)

Bottom line, shop around, including with your current company while dropping low value/high cost add-ons and revising other coverage. Compare apples-to-apples.

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