Does umbrella insurance premium change over time?

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wubdemil
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Joined: Tue Jul 30, 2019 9:30 am

Does umbrella insurance premium change over time?

Post by wubdemil » Wed Nov 06, 2019 5:03 pm

I think life insurance premium (monthly payment) does not change over time. How about umbrella insurance? I contacted an insurance company to buy umbrella insurance and they quoted me a number but I forgot to ask whether it is fixed for a number of years or it changes from period to period, say semiannually like a car insurance.

What is your experience?

Gill
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Re: Does umbrella insurance premium change over time?

Post by Gill » Wed Nov 06, 2019 5:06 pm

It will usually change annually and will likely change with changes in your circumstances such as acquiring a second house, child becoming a driver, acquisition of a boat and that type of thing.
Gill
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Barefoot
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Re: Does umbrella insurance premium change over time?

Post by Barefoot » Wed Nov 06, 2019 6:03 pm

Mine went way down when my kids went out on their own and off my car insurance.

Mako
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Re: Does umbrella insurance premium change over time?

Post by Mako » Wed Nov 06, 2019 7:20 pm

Mine hasn’t changed in the 5 years I’ve had it. In that time I’ve moved twice, been in 2 minor car accidents, and the family got an additional car with a new 30 minute commute. I’d think those kinds of things might change it, and I’m surprised it hasn’t changed.

Rwsawbones
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Re: Does umbrella insurance premium change over time?

Post by Rwsawbones » Wed Nov 06, 2019 7:25 pm

The premium does indeed depend on exposures in terms of young drivers, numbers of cars, numbers of residences, power boats, snow mobiles and the like. But much older people in late 60s and above see a very high increase in premium. Maybe old folks are riskier drivers similar to teenagers.

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ram
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Re: Does umbrella insurance premium change over time?

Post by ram » Wed Nov 06, 2019 7:35 pm

Rwsawbones wrote:
Wed Nov 06, 2019 7:25 pm
The premium does indeed depend on exposures in terms of young drivers, numbers of cars, numbers of residences, power boats, snow mobiles and the like. But much older people in late 60s and above see a very high increase in premium. Maybe old folks are riskier drivers similar to teenagers.
Young people (16-19) are worst drivers. Old people (80+) are second worst drivers.
https://aaafoundation.org/rates-motor-v ... 2014-2015/

Our rates went up as kids started driving and rates are coming down as between the two they have had >10 yrs of accident free driving.
Ram

Teague
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Re: Does umbrella insurance premium change over time?

Post by Teague » Wed Nov 06, 2019 8:15 pm

Yes, the premium can and does change. Besides a price increase, they can change the terms of your policy when it's being renewed. For example, today I received a 10+ page "Notice of Policy Change" from Geico. Lots more exclusions, more restrictive language, etc. So, even if my premium hadn't changed a bit, I would effectively be getting significantly less insurance for the same money. (I'm going to shop for another provider now.)
Semper Augustus

Grt2bOutdoors
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Re: Does umbrella insurance premium change over time?

Post by Grt2bOutdoors » Wed Nov 06, 2019 8:19 pm

Teague wrote:
Wed Nov 06, 2019 8:15 pm
Yes, the premium can and does change. Besides a price increase, they can change the terms of your policy when it's being renewed. For example, today I received a 10+ page "Notice of Policy Change" from Geico. Lots more exclusions, more restrictive language, etc. So, even if my premium hadn't changed a bit, I would effectively be getting significantly less insurance for the same money. (I'm going to shop for another provider now.)
Can you shop umbrella? Usually the issuing company wants your auto, home and whatever else you insure.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Teague
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Re: Does umbrella insurance premium change over time?

Post by Teague » Wed Nov 06, 2019 8:25 pm

Grt2bOutdoors wrote:
Wed Nov 06, 2019 8:19 pm
Teague wrote:
Wed Nov 06, 2019 8:15 pm
Yes, the premium can and does change. Besides a price increase, they can change the terms of your policy when it's being renewed. For example, today I received a 10+ page "Notice of Policy Change" from Geico. Lots more exclusions, more restrictive language, etc. So, even if my premium hadn't changed a bit, I would effectively be getting significantly less insurance for the same money. (I'm going to shop for another provider now.)
Can you shop umbrella? Usually the issuing company wants your auto, home and whatever else you insure.
I think so, we'll find out. I currently have my homeowner's policy with AAA, car and umbrella with Geico.
Semper Augustus

Iridium
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Re: Does umbrella insurance premium change over time?

Post by Iridium » Wed Nov 06, 2019 9:06 pm

wubdemil wrote:
Wed Nov 06, 2019 5:03 pm
I think life insurance premium (monthly payment) does not change over time. How about umbrella insurance? I contacted an insurance company to buy umbrella insurance and they quoted me a number but I forgot to ask whether it is fixed for a number of years or it changes from period to period, say semiannually like a car insurance.

What is your experience?
It can change just like car insurance. In my experience, the premium changes do not happen as often because the market for umbrellas simply is not as dynamic as the auto insurance market. However, I understand that at every renewal, they have the right to quote me a different number.

In general, insurance premiums are allowed to change at each renewal period. The reason life insurance is sold on a guaranteed premium basis is that:

1) You wouldn't want life insurance to jack up your rates at renewal of they found out you had cancer: that would completely defeat the point of having carried the insurance. Whereas, with an umbrella, it would be a bummer, but if they raised prices too high, you can always drop it. Even if the lawsuit isn't filed until after the insurance expires, it is the umbrella in force at the time of the incident that is on the hook. In other words, even if your umbrella dropped you immediately after your first car accident, you still benefit from having carried the insurance (as they will protect you on that accident).

2) The only folks who leave life insurance plans are those whose health has remained stable or improved. This means that the older the policy, the less heathy the group, relative to their original underwriting. To fight against this, a level term policy charges more than actuarily necessary in the first few years and subsidizes the premiums in later years. After subsidy, the rate is still competitive with a new policy for healthy individuals, so they don't have an incentive to leave the risk pool.

MikeG62
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Re: Does umbrella insurance premium change over time?

Post by MikeG62 » Thu Nov 07, 2019 7:29 am

Same question was asked a few weeks ago in another thread. See here for a dozen or so additional responses.

viewtopic.php?f=2&t=293516&p=4811930#p4811930

Mine has gone up by roughly a mid single-digit % each year.
Real Knowledge Comes Only From Experience

GuyInFL
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Re: Does umbrella insurance premium change over time?

Post by GuyInFL » Thu Nov 07, 2019 8:00 am

Barefoot wrote:
Wed Nov 06, 2019 6:03 pm
Mine went way down when my kids went out on their own and off my car insurance.
+1

tj
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Re: Does umbrella insurance premium change over time?

Post by tj » Thu Nov 07, 2019 10:18 am

Grt2bOutdoors wrote:
Wed Nov 06, 2019 8:19 pm
Teague wrote:
Wed Nov 06, 2019 8:15 pm
Yes, the premium can and does change. Besides a price increase, they can change the terms of your policy when it's being renewed. For example, today I received a 10+ page "Notice of Policy Change" from Geico. Lots more exclusions, more restrictive language, etc. So, even if my premium hadn't changed a bit, I would effectively be getting significantly less insurance for the same money. (I'm going to shop for another provider now.)
Can you shop umbrella? Usually the issuing company wants your auto, home and whatever else you insure.

Yes you can. 4 companies offer standalone umbrellas. Off the top of my head, two of them are RLI and Auto Owners.

GAAP
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Re: Does umbrella insurance premium change over time?

Post by GAAP » Thu Nov 07, 2019 6:52 pm

Rwsawbones wrote:
Wed Nov 06, 2019 7:25 pm
But much older people in late 60s and above see a very high increase in premium. Maybe old folks are riskier drivers similar to teenagers.
That is exactly the explanation provided by my insurance provider.
“Adapt what is useful, reject what is useless, and add what is specifically your own.” ― Bruce Lee

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