Comparing Auto/Umbrella Combo Policies

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boglemann
Posts: 3
Joined: Sun Sep 26, 2021 8:41 pm

Comparing Auto/Umbrella Combo Policies

Post by boglemann »

Hey all! My first post here. Really grateful for all the knowledge shared here.
I'm currently up for an auto and umbrella policy renewal, so I'd like to get your feedback on the policy I found to be cheaper than what I have.

Current Auto Policy:
Provider: Geico
Bodily Injury/Liability: $500K/$500K
Property Damage Liability: $100K
UM/UM: $500K/$500K
UM Property Damage: $3,500
No Comprehensive

6-month Premium: $308 (an increase from $191 recently)

Current Umbrella Policy:
Provider: RLI (via Geico)
Coverage: $2M
Excess UM/UM: $1M

1-year Premium: $708 (out of which $189 is for the Excess UM/UM coverage, and an overall increase from $436 recently)

Yearly Total (auto+umbrella): $1,364


Proposed Auto Policy:
Provider: Connect (via Costco)
Limits:
Bodily Injury/Liability: $250K/$500K (maximum they allow)
Property Damage Liability: $100K
UM/UM: $250K/$500K (maximum they allow)
UM Property Damage: $3,500
No Comprehensive

6-month Premium: $201

Proposed Umbrella Policy:
Provider: Connect (via Costco)
Limits:
Coverage: $2M

1-year Premium $275


Now the questions:

1. Connect (Costco) say that for the auto policy the BI/Liability limits $250K/$500K are "almost the same" as $500K/$500K I have with Geico, but I'm not so sure about that as this can potentially increase my exposure to the Umbrella claim. I think 500/500 per incident/person is better than 250/500. Am I overreacting or what's the opinion on that?

2. Connect (Costco) Umbrella policy requires that I also purchase a Home Insurance policy for an additional $198, which brings my yearly insurance total with them to $875, which is still cheaper than what Geico is quoting me, but I'm on the fence about the necessity of a Home policy plus that lesser BI/Liability limit of 250K/500K than Geico makes me nervous. What's the opinion on having the extra Home policy for a rented place where I'm not even the primary renter?

3. Is the extra Geico umbrella policy's Excess UM/UM coverage (which Connect doesn't offer in my area) really worth it?

4. The price Connect is quoting me is cheaper than Geico. Is Connect as a company any better or all these insurers are the same more or less?

5. And finally, is the Connect deal better than Geico all things considered?
random_walker_77
Posts: 2207
Joined: Tue May 21, 2013 8:49 pm

Re: Comparing Auto/Umbrella Combo Policies

Post by random_walker_77 »

boglemann wrote: Sun Oct 17, 2021 6:02 pm 1. Connect (Costco) say that for the auto policy the BI/Liability limits $250K/$500K are "almost the same" as $500K/$500K I have with Geico, but I'm not so sure about that as this can potentially increase my exposure to the Umbrella claim. I think 500/500 per incident/person is better than 250/500. Am I overreacting or what's the opinion on that?

2. Connect (Costco) Umbrella policy requires that I also purchase a Home Insurance policy for an additional $198, which brings my yearly insurance total with them to $875, which is still cheaper than what Geico is quoting me, but I'm on the fence about the necessity of a Home policy plus that lesser BI/Liability limit of 250K/500K than Geico makes me nervous. What's the opinion on having the extra Home policy for a rented place where I'm not even the primary renter?
Since no one else has jumped in, I'll take a crack at it. In most states, Umbrella covers the difference between your primary limit and the umbrella limit. So a 1M policy brings your coverage up to 1M from the 250/500 on your primary. I've heard that there might be some states in which Umbrella stacks on top and actually adds a full 1M of additional coverage (for example), but I don't know if that's true. The general rule is to make sure your primary insurance has limits sufficient to meet the umbrella's requirements. After that, it doesn't matter to you b/c the umbrella will cover the rest up to, in your case, $2M. If you don't have umbrella, then you definitely prefer 500/500 over 250/500. But if you have umbrella and it only requires 100/300, then you've wasted money by overbuying on your primary policy.

It's not a bad idea to have renter's insurance, as a renter. It covers your stuff, and provides personal liability coverage. Not sure if you qualify for this "home insurance policy" as a renter, but if you do, $200/yr isn't all that different from renter's insurance.

UM is important. If someone uninsured sends you to the hospital with permanent disabilities, it'd be good to have. To put it mildly, there's probably some correlation between irresponsible drivers and uninsured scofflaws, which is also part of why this one is so expensive. UM protects you for lost wages, pain and suffering, medical expenses etc. Usually, medical bills from an accident are covered by auto insurance, but if you can convince your health insurer there's no one else to go after, they'll probably cover it. Waive UM w/ due care.

With an insurer, you want to know that they have the money and will back up their promise to pay if it comes to that. Then, the question is how easy are they to work with, if you have a claim? I've never heard of Connect, but I do trust Costco. And if Connect gives you trouble, you could complain to costco and probably get costco to back you up... do your due diligence, but based on the Costco angle, I'd certainly give them serious consideration.

Final thought -- it's hard to know what's a good deal. You might also want to contact a reputable independent insurance broker, and have them shop it around to see what they come up with. They might be able to find an even better deal. And if not, that's also good to know.
talzara
Posts: 4745
Joined: Thu Feb 12, 2009 6:40 pm

Re: Comparing Auto/Umbrella Combo Policies

Post by talzara »

random_walker_77 wrote: Thu Nov 04, 2021 9:29 pm In most states, Umbrella covers the difference between your primary limit and the umbrella limit. So a 1M policy brings your coverage up to 1M from the 250/500 on your primary. I've heard that there might be some states in which Umbrella stacks on top and actually adds a full 1M of additional coverage (for example), but I don't know if that's true.
In most states, umbrella stacks on top of the primary auto coverage. A $250k primary policy and a $2 million umbrella policy would have an aggregate coverage limit of $2.25 million, not $2 million.

What you've described is the exception to the rule.
random_walker_77 wrote: Thu Nov 04, 2021 9:29 pm With an insurer, you want to know that they have the money and will back up their promise to pay if it comes to that. Then, the question is how easy are they to work with, if you have a claim? I've never heard of Connect, but I do trust Costco. And if Connect gives you trouble, you could complain to costco and probably get costco to back you up... do your due diligence, but based on the Costco angle, I'd certainly give them serious consideration.
Connect used to be branded as Ameriprise Insurance. The company was founded as IDS, got bought by American Express, got spun off as part of Ameriprise, and is now owned by American Family, the 9th largest auto insurer in the United States.

Connect has a track record of poor service. Its complaint ratio is high for both auto insurance and homeowners insurance. It is surprising that it is the insurance provider at Costco, which has a reputation for quality. It may have been part of a package deal with American Express, which was the exclusive credit card at Costco before it switched to Visa.

Claims service is less important for auto liability insurance since it is the other driver that is filing the claim. It is more important for auto collision insurance and homeowners insurance since you are insuring your own property.
random_walker_77
Posts: 2207
Joined: Tue May 21, 2013 8:49 pm

Re: Comparing Auto/Umbrella Combo Policies

Post by random_walker_77 »

talzara wrote: Fri Nov 05, 2021 3:29 pm
random_walker_77 wrote: Thu Nov 04, 2021 9:29 pm In most states, Umbrella covers the difference between your primary limit and the umbrella limit. So a 1M policy brings your coverage up to 1M from the 250/500 on your primary. I've heard that there might be some states in which Umbrella stacks on top and actually adds a full 1M of additional coverage (for example), but I don't know if that's true.
In most states, umbrella stacks on top of the primary auto coverage. A $250k primary policy and a $2 million umbrella policy would have an aggregate coverage limit of $2.25 million, not $2 million.

What you've described is the exception to the rule.
Thank you for the correction. It's good to learn something new. Is there an industry term for this behavior of whether it stacks, or a list of these exception states? An agent once told me about this, and I don't remember if that was before or after moving across state lines...
talzara
Posts: 4745
Joined: Thu Feb 12, 2009 6:40 pm

Re: Comparing Auto/Umbrella Combo Policies

Post by talzara »

random_walker_77 wrote: Fri Nov 05, 2021 10:17 pm Thank you for the correction. It's good to learn something new. Is there an industry term for this behavior of whether it stacks, or a list of these exception states? An agent once told me about this, and I don't remember if that was before or after moving across state lines...
They're called stacked or unstacked limits.

Unstacked personal umbrella policies are unusual. Umbrellas are excess liability policies, so the default is stacked. For a policy to be unstacked, it would have to say so.
Hypersion
Posts: 311
Joined: Mon Feb 18, 2013 2:20 am

Re: Comparing Auto/Umbrella Combo Policies

Post by Hypersion »

I thought you would have to have renter's insurance in order to get umbrella insurance. You should talk to geico and make sure you don't have a gap in your insurance in case something happens in your rental home.
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