Excessively Expensive Umbrella Quote

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
Radiata
Posts: 19
Joined: Sat Oct 02, 2021 2:36 pm

Excessively Expensive Umbrella Quote

Post by Radiata »

After reading a recent thread on umbrella policies, I decided to get a quote from Geico since my auto policy is also with them. I expected to get a quote of around ~$150-200 based on posts by other BHs for $1M and maybe a bit more for $2M. But they the quote came out with a whopping annual premium of $500 with a limit of $1M. Parameters of the quote are shown below.

I thought it would be cheap given that we do not have kids, boats, violations, accidents etc. My fiancé recently was given a house in a foreign country (Germany), and I did mention it to them since they asked about foreign property. It’s a deal where her parents live in the house for the rest of their lives, but she is the owner.

Perhaps this is why the quote was so high. I was also surprised that they would not cover more than $1M. My goal was to get coverage of at least $2M since our taxable accounts (non-401k or Roth) total about $1.6-1.7M. Ages are 35 and 42.

Does the upper limit of coverage ever increase with time? Does this agree with others who have foreign property and parameters?

What should I do? Buy the $1M policy even though it would not cover all our exposed assets? Shop around? If so, what are companies that you use?

Parameters of umbrella quote:
2 = Vehicles
2 = Residential Properties
0 = Watercraft (other than Personal Watercraft)
0 = Personal Watercraft
2 = Drivers
0 = Drivers under the age of 22
0 = Drivers age 70 and older
0 = Violations
0 = At-Fault accidents
0 = Antique vehicles
0 = Drivers licensed < 1 year or non-U.S. license
0 = DUI/DWI
1 = Acres
1 = Properties outside U.S.
0 = Drivers age 21 and under and/or 80 and over with incident
No = Drivers over age 80
No = Uninsured/Underinsured Motorists Coverage
jebmke
Posts: 13984
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Excessively Expensive Umbrella Quote

Post by jebmke »

Does seem high. I get $5 million for about the same price. USAA.

2 drivers in 60s, 2 Cars
Pool
~ 3 acres with home.

Might be the international property.
When you discover that you are riding a dead horse, the best strategy is to dismount.
bbqguru
Posts: 192
Joined: Sat Sep 17, 2011 8:31 pm

Re: Excessively Expensive Umbrella Quote

Post by bbqguru »

It's probably the international exposure. Most umbrellas offer worldwide coverage, thus the international question. When your underlying auto/home doesn't offer coverage, the umbrella sometimes becomes primary. So it might be picking up mandatory coverage in Germany that isn't required in the US? Just thinking out loud though.
Gill
Posts: 7761
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Excessively Expensive Umbrella Quote

Post by Gill »

I dumped GEICO this year when my umbrella premium doubled with no change in the risk. I’ve hear similar reports elsewhere
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
Fired2020
Posts: 26
Joined: Sat Jan 23, 2021 4:12 pm

Re: Excessively Expensive Umbrella Quote

Post by Fired2020 »

I hate GEICO - had a bad experience with them but admittedly it was 25 years ago.

I pay $190 / $2,000,000 through Erie Insurance. I have just one car, one driver, and own a single $225K property.
talzara
Posts: 2041
Joined: Thu Feb 12, 2009 7:40 pm

Re: Excessively Expensive Umbrella Quote

Post by talzara »

Radiata wrote: Wed Nov 24, 2021 6:04 pm After reading a recent thread on umbrella policies, I decided to get a quote from Geico since my auto policy is also with them. I expected to get a quote of around ~$150-200 based on posts by other BHs for $1M and maybe a bit more for $2M. But they the quote came out with a whopping annual premium of $500 with a limit of $1M.
Since people are posting their premiums without also posting their ZIP codes, it's as useful to you as a table of random numbers. Even within the same state, one ZIP code could pay double what another ZIP code pays.

Get some more quotes. Then you'll know whether your quote is high or low.

GEICO has been losing money on umbrella, so it's been raising rates and reducing limits recently. It's even been sending its own customers to standalone umbrella insurers in some areas.
Radiata wrote: Wed Nov 24, 2021 6:04 pm What should I do? Buy the $1M policy even though it would not cover all our exposed assets? Shop around? If so, what are companies that you use?
You could try the standalone insurers: RLI, USLI, Stillwater, etc.

You could also try your homeowners insurer. Some companies are willing to write umbrella over their own homeowners policy, without requiring you to carry their auto policy.

Otherwise, you'd have to shop your auto policy alongside the umbrella.
User avatar
whodidntante
Posts: 10259
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: Excessively Expensive Umbrella Quote

Post by whodidntante »

$300 for a mil when I had it. I ended up dropping it because it didn't cover the main risks I was concerned about which are professional liability and torts.
talzara
Posts: 2041
Joined: Thu Feb 12, 2009 7:40 pm

Re: Excessively Expensive Umbrella Quote

Post by talzara »

jebmke wrote: Wed Nov 24, 2021 6:08 pm It's probably the international exposure. Most umbrellas offer worldwide coverage, thus the international question. When your underlying auto/home doesn't offer coverage, the umbrella sometimes becomes primary. So it might be picking up mandatory coverage in Germany that isn't required in the US? Just thinking out loud though.
GEICO does not cover property in Germany, and it does not charge for it either. The GEICO umbrella policy states:
This policy applies to personal injury and property damage which take place anywhere in the world during the time this policy is in force, provided that suit is brought in the United States of America, its territories and possessions, or Canada. This policy does not apply to any damages arising from the ownership, maintenance, use, rental, leasing, entrustment or supervision of real property located outside of the United States of America, its territories and possessions, or Canada.
GEICO may have been trying to place the OP with a standalone umbrella insurer, which may provide that coverage.
afan
Posts: 6389
Joined: Sun Jul 25, 2010 4:01 pm

Re: Excessively Expensive Umbrella Quote

Post by afan »

The solution to overpriced insurance is always to shop. If you cannot find a less expensive policy, then you know that yours is the best available.

There are many threads on umbrella insurance costs. No one has come up with explanations for the variations in prices.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
Topic Author
Radiata
Posts: 19
Joined: Sat Oct 02, 2021 2:36 pm

Re: Excessively Expensive Umbrella Quote

Post by Radiata »

Thank you all. I will shop around. It is encouraging to hear that others have had similar experiences with Geico, so it may be the company in addition to some added risk of the international property.
DrivingFun
Posts: 272
Joined: Wed Sep 19, 2007 6:12 pm

Re: Excessively Expensive Umbrella Quote

Post by DrivingFun »

Personally I have found it to be helpful to go through insurance brokers that will shop your insurance package for you and get you comps from a bunch of providers at once. As far as the umbrella, I just got mine two days ago. We're of similar age, similar assets, same two drives, two cars, one property (no international wrinkle here). The umbrella itself for 1MM was additional $157. However it's important to note that in order to obtain this coverage I had to max out my auto and home coverages. This meant increasing my auto to 250/500/100, and home liability to 500. These increases added up to additional $150. So in total I am looking at a $300 annual increase.

I also wanted to note that as far as I understand, your umbrella sits on top of your auto and home policies. This means that your total coverage is not 1MM, but at least 1.25MM in case of an at fault accident with a single injury. Or as high as 1.5MM in case of multiple injuries.
carolinaman
Posts: 4854
Joined: Wed Dec 28, 2011 9:56 am
Location: North Carolina

Re: Excessively Expensive Umbrella Quote

Post by carolinaman »

I have auto, home and umbrella with State Farm. Just got renewal for umbrella, $3M @ $462 for year. I am paying a little more because of an at fault minor accident 2 years ago. It sounds like you need to shop around.

I shopped all of my policies with several companies 3 years ago and found State Farm, my longtime insurer, to be cheapest overall for all 3 policies. Some were cheaper on one policy but not the total package. I just got a new agent whom I do not like but her staff is good, so I will stay the course.
User avatar
CalculatedRisk
Posts: 260
Joined: Tue Sep 11, 2018 8:04 pm

Re: Excessively Expensive Umbrella Quote

Post by CalculatedRisk »

Radiata wrote: Wed Nov 24, 2021 6:04 pm My goal was to get coverage of at least $2M since our taxable accounts (non-401k or Roth) total about $1.6-1.7M.
I’m not sure I understand why your desired coverage is based on your net worth. You realize that $2M coverage doesn’t protect $2M of assets, right? The insurance would only cover the first $2M of any settlement/judgment.

Some would argue that the more assets you have, the less umbrella coverage you need. That being said, we’re looking to up our coverage from $1M to $2M because we think that amount would either cover any settlement/judgement or induce the insurance company to pay up for competent lawyers.
egrets
Posts: 747
Joined: Sun Jul 05, 2020 2:56 pm
Location: Rhode Island

Re: Excessively Expensive Umbrella Quote

Post by egrets »

I pay Amica about $400 for $5mil. One house, one car, one driver, over seventy. They have my homeowners and auto as well.
MedSaver
Posts: 199
Joined: Sun Jul 02, 2017 5:33 pm

Re: Excessively Expensive Umbrella Quote

Post by MedSaver »

We have GEICO and have a very similar risk profile as you, except the property in Germany. We get $3 million coverage for about $500.
exodusNH
Posts: 1360
Joined: Wed Jan 06, 2021 8:21 pm

Re: Excessively Expensive Umbrella Quote

Post by exodusNH »

carolinaman wrote: Thu Nov 25, 2021 10:46 am I have auto, home and umbrella with State Farm. Just got renewal for umbrella, $3M @ $462 for year. I am paying a little more because of an at fault minor accident 2 years ago. It sounds like you need to shop around.

I shopped all of my policies with several companies 3 years ago and found State Farm, my longtime insurer, to be cheapest overall for all 3 policies. Some were cheaper on one policy but not the total package. I just got a new agent whom I do not like but her staff is good, so I will stay the course.
In case you're not aware, the agent has no control over pricing. They're selected on their ability to produce sales for State Farm. (Source: me, who has a friend who is one of the relatively few who has two different State Farm offices. Their contracts are up for renewal every few years. If you don't produce, they don't renew you.)

While they can't affect prices, they can be helpful in terms of what coverage to get. E.g. maybe it cheaper to raise your auto and home liabilities than it is to get umbrella.

I have auto, home, and umbrella through them. The costs aren't much different than that I paid elsewhere. State Farm is the only major insurer that doesn't offer teaser rates (new customer bonus) and the raises rates after a few years (loyalty penalty), relying on inertia.

You could call a different agent and move to your policies over.
My agent is based in one town over even though there is one in my town.
User avatar
snackdog
Posts: 1253
Joined: Wed Nov 12, 2014 4:57 am

Re: Excessively Expensive Umbrella Quote

Post by snackdog »

We use RLI as standalone (since USAA turned us down for Umbrella).

You can check rates online here.

https://myportal.rlicorp.com/content/rl ... quote.html
User avatar
Watty
Posts: 23823
Joined: Wed Oct 10, 2007 3:55 pm

Re: Excessively Expensive Umbrella Quote

Post by Watty »

Just like credit bureaus report a credit history and score there is CLUE report that will report your history of insurance claims. You can request a copy of that to see if there are any errors.
Radiata wrote: Wed Nov 24, 2021 6:04 pm 2 = Residential Properties
That is a big factor so it is basically $250 per property which is more reasonable. Where they are located is very important since some states are known for having large lawsuits.

Your credit scores may also be a factor. If your fiancé has not been in the US for a long time she may not have a high credit score or no credit score at all.

If your fiancé has not had a US driver's license for a long time she will also have a short driving history.
talzara
Posts: 2041
Joined: Thu Feb 12, 2009 7:40 pm

Re: Excessively Expensive Umbrella Quote

Post by talzara »

Watty wrote: Sat Nov 27, 2021 8:20 am
Radiata wrote: Wed Nov 24, 2021 6:04 pm 2 = Residential Properties
That is a big factor so it is basically $250 per property which is more reasonable. Where they are located is very important since some states are known for having large lawsuits.
GEICO charges for the first property, but additional properties are less than $20.

The location of the property does not matter. The premium for a second property is determined by the state of residence.
Watty wrote: Sat Nov 27, 2021 8:20 am Your credit scores may also be a factor. If your fiancé has not been in the US for a long time she may not have a high credit score or no credit score at all.

If your fiancé has not had a US driver's license for a long time she will also have a short driving history.
These are not used as rate factors in GEICO's existing umbrella product, but they will be used in GEICO's new umbrella product. The OP did not identify the state, so we don't know if the new product is already in use in that state.

GEICO is tired of losing money on umbrella. It started with a round of rate increases to get back to profitability, and now it's trying to segment the risk better. The new rate manual uses a lot of techniques from auto insurance.
JohnSmith123
Posts: 55
Joined: Sat Dec 30, 2017 8:24 pm

Re: Excessively Expensive Umbrella Quote

Post by JohnSmith123 »

Anyone have any quotes for california? I am getting quotes for $5M at $1500?
AnnetteLouisan
Posts: 1210
Joined: Sat Sep 18, 2021 10:16 pm
Location: New York, NY

Re: Excessively Expensive Umbrella Quote

Post by AnnetteLouisan »

whodidntante wrote: Wed Nov 24, 2021 7:39 pm $300 for a mil when I had it. I ended up dropping it because it didn't cover the main risks I was concerned about which are professional liability and torts.
Did you find somewhere to cover that?
Sweetbriar
Posts: 45
Joined: Sat Aug 23, 2014 4:36 pm

Re: Excessively Expensive Umbrella Quote

Post by Sweetbriar »

JohnSmith123 wrote: Sat Nov 27, 2021 3:44 pm Anyone have any quotes for california? I am getting quotes for $5M at $1500?
Live in CA...Just received a quote for $1200 for 5mil coverage from Snack dog's RLI website! Looked good for us, as our renewal from other company in AZ would charge us $1350 for 3mil coverage!! Many companies no longer writing Umbrella to CA residents!
sport
Posts: 10727
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Excessively Expensive Umbrella Quote

Post by sport »

exodusNH wrote: Sat Nov 27, 2021 12:57 am
carolinaman wrote: Thu Nov 25, 2021 10:46 am I have auto, home and umbrella with State Farm. Just got renewal for umbrella, $3M @ $462 for year. I am paying a little more because of an at fault minor accident 2 years ago. It sounds like you need to shop around.

I shopped all of my policies with several companies 3 years ago and found State Farm, my longtime insurer, to be cheapest overall for all 3 policies. Some were cheaper on one policy but not the total package. I just got a new agent whom I do not like but her staff is good, so I will stay the course.
In case you're not aware, the agent has no control over pricing. They're selected on their ability to produce sales for State Farm. (Source: me, who has a friend who is one of the relatively few who has two different State Farm offices. Their contracts are up for renewal every few years. If you don't produce, they don't renew you.)

While they can't affect prices, they can be helpful in terms of what coverage to get. E.g. maybe it cheaper to raise your auto and home liabilities than it is to get umbrella.

I have auto, home, and umbrella through them. The costs aren't much different than that I paid elsewhere. State Farm is the only major insurer that doesn't offer teaser rates (new customer bonus) and the raises rates after a few years (loyalty penalty), relying on inertia.

You could call a different agent and move to your policies over.
My agent is based in one town over even though there is one in my town.
I had a similar experience. I had a good State Farm agent who retired. I was switched to another agent and I stayed with them for a number of years. When I became dissatisfied with the service I was getting, I contacted another State Farm agent and they helped me transfer all my policies over to them. I am much happier with my current agent and have recommended them to others.
UpperNwGuy
Posts: 6641
Joined: Sun Oct 08, 2017 7:16 pm

Re: Excessively Expensive Umbrella Quote

Post by UpperNwGuy »

whodidntante wrote: Wed Nov 24, 2021 7:39 pm $300 for a mil when I had it. I ended up dropping it because it didn't cover the main risks I was concerned about which are professional liability and torts.
I'm surprised you don't have a stand-alone policy for professional liability.
User avatar
abuss368
Posts: 25492
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Excessively Expensive Umbrella Quote

Post by abuss368 »

Radiata wrote: Wed Nov 24, 2021 6:04 pm After reading a recent thread on umbrella policies, I decided to get a quote from Geico since my auto policy is also with them. I expected to get a quote of around ~$150-200 based on posts by other BHs for $1M and maybe a bit more for $2M. But they the quote came out with a whopping annual premium of $500 with a limit of $1M. Parameters of the quote are shown below.

I thought it would be cheap given that we do not have kids, boats, violations, accidents etc. My fiancé recently was given a house in a foreign country (Germany), and I did mention it to them since they asked about foreign property. It’s a deal where her parents live in the house for the rest of their lives, but she is the owner.

Perhaps this is why the quote was so high. I was also surprised that they would not cover more than $1M. My goal was to get coverage of at least $2M since our taxable accounts (non-401k or Roth) total about $1.6-1.7M. Ages are 35 and 42.

Does the upper limit of coverage ever increase with time? Does this agree with others who have foreign property and parameters?

What should I do? Buy the $1M policy even though it would not cover all our exposed assets? Shop around? If so, what are companies that you use?

Parameters of umbrella quote:
2 = Vehicles
2 = Residential Properties
0 = Watercraft (other than Personal Watercraft)
0 = Personal Watercraft
2 = Drivers
0 = Drivers under the age of 22
0 = Drivers age 70 and older
0 = Violations
0 = At-Fault accidents
0 = Antique vehicles
0 = Drivers licensed < 1 year or non-U.S. license
0 = DUI/DWI
1 = Acres
1 = Properties outside U.S.
0 = Drivers age 21 and under and/or 80 and over with incident
No = Drivers over age 80
No = Uninsured/Underinsured Motorists Coverage
Simple: shop! I have much more coverage than that for far less in premium. Have been with our insurance company for almost 35 years.

You can do much better.

Then call Geico and tell them “Your Terminated”!

Best.
💪
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Post Reply