umbrella insurance negative cost?

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GuySmiley
Posts: 41
Joined: Fri Aug 10, 2018 6:02 am

umbrella insurance negative cost?

Post by GuySmiley » Wed Apr 17, 2019 9:09 am

I recently added umbrella coverage after reading recommendations here. This is through Travelers, where I also have home and auto policies. I was expecting a bill, and instead received a small refund check. The prorated cost for the next few months was negative. I take it with a smile of course, but does anyone have thoughts on this, something to look into further?

michaeljc70
Posts: 4816
Joined: Thu Oct 15, 2015 3:53 pm

Re: umbrella insurance negative cost?

Post by michaeljc70 » Wed Apr 17, 2019 9:16 am

I would look into it further and make sure they didn't make any other changes you didn't want.

thx1138
Posts: 856
Joined: Fri Jul 12, 2013 2:14 pm

Re: umbrella insurance negative cost?

Post by thx1138 » Wed Apr 17, 2019 9:25 am

Look into further, but usually an umbrella policy ends up adjusting the liability limits on a bunch of underlying policies. Also some places give you a multiple policy discount. So it is possible that if say your home and auto policies had very high liability limits that adding the umbrella lowered those limits reducing those policy costs a bit while you got a multi-policy discount. This would be unusual but certainly not impossible. I'd look closely at what things changed on your auto and home policies and make sure you are OK with them.

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dm200
Posts: 19755
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: umbrella insurance negative cost?

Post by dm200 » Wed Apr 17, 2019 9:28 am

michaeljc70 wrote:
Wed Apr 17, 2019 9:16 am
I would look into it further and make sure they didn't make any other changes you didn't want.
Yes - could be some kind of mistake.

quantAndHold
Posts: 2934
Joined: Thu Sep 17, 2015 10:39 pm

Re: umbrella insurance negative cost?

Post by quantAndHold » Wed Apr 17, 2019 10:00 am

It’s common. Adding the umbrella policy will trigger things like multiple policy discounts, lower prices because of lower limits on auto or home, etc. When we added umbrella, the total of all our policies combined went down $300.

FrugalPete
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Joined: Mon May 21, 2018 5:05 am

Re: umbrella insurance negative cost?

Post by FrugalPete » Wed Apr 17, 2019 10:11 am

Just tagging a question onto this. I got my quote for umbrella insurance($1mil liability), and between that and my car insurance(which also has to increase from increased liability), the premium difference is $700/year. Is this crazy high, because from what I've read it seems like it is?

deltaneutral83
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Joined: Tue Mar 07, 2017 4:25 pm

Re: umbrella insurance negative cost?

Post by deltaneutral83 » Wed Apr 17, 2019 10:15 am

FrugalPete wrote:
Wed Apr 17, 2019 10:11 am
Just tagging a question onto this. I got my quote for umbrella insurance($1mil liability), and between that and my car insurance(which also has to increase from increased liability), the premium difference is $700/year. Is this crazy high, because from what I've read it seems like it is?
16 year old kids, pool, speeding tickets recently, any other situation that creates risk for the insurance company ?

FrugalPete
Posts: 4
Joined: Mon May 21, 2018 5:05 am

Re: umbrella insurance negative cost?

Post by FrugalPete » Wed Apr 17, 2019 10:44 am

deltaneutral83 wrote:
Wed Apr 17, 2019 10:15 am
FrugalPete wrote:
Wed Apr 17, 2019 10:11 am
Just tagging a question onto this. I got my quote for umbrella insurance($1mil liability), and between that and my car insurance(which also has to increase from increased liability), the premium difference is $700/year. Is this crazy high, because from what I've read it seems like it is?
16 year old kids, pool, speeding tickets recently, any other situation that creates risk for the insurance company ?
Nah none of that, just me and the wife in our 30s, with no negative history. The policy is $450/year, but the agent said our car liabilities will have to go up as well, adding $130/year to each car. Might have to look for a stand alone policy but those are tough to find...

deltaneutral83
Posts: 1067
Joined: Tue Mar 07, 2017 4:25 pm

Re: umbrella insurance negative cost?

Post by deltaneutral83 » Wed Apr 17, 2019 10:47 am

FrugalPete wrote:
Wed Apr 17, 2019 10:44 am
deltaneutral83 wrote:
Wed Apr 17, 2019 10:15 am
FrugalPete wrote:
Wed Apr 17, 2019 10:11 am
Just tagging a question onto this. I got my quote for umbrella insurance($1mil liability), and between that and my car insurance(which also has to increase from increased liability), the premium difference is $700/year. Is this crazy high, because from what I've read it seems like it is?
16 year old kids, pool, speeding tickets recently, any other situation that creates risk for the insurance company ?
Nah none of that, just me and the wife in our 30s, with no negative history. The policy is $450/year, but the agent said our car liabilities will have to go up as well, adding $130/year to each car. Might have to look for a stand alone policy but those are tough to find...
Depending on your zip code, $450 on a mil with two adult drivers and a home seems a tad high, but COL in zip code will matter. Try shopping around for firms that will bundle Home/Auto/Umbrella.

Topic Author
GuySmiley
Posts: 41
Joined: Fri Aug 10, 2018 6:02 am

Re: umbrella insurance negative cost?

Post by GuySmiley » Thu Apr 18, 2019 3:58 pm

Spoke with my insurance agent, he called Travelers and they confirmed it was legit and the likely key factor was that I paid off the mortgage after my most recent premium payment, which lowered the risk factor.

quantAndHold
Posts: 2934
Joined: Thu Sep 17, 2015 10:39 pm

Re: umbrella insurance negative cost?

Post by quantAndHold » Thu Apr 18, 2019 5:36 pm

FrugalPete wrote:
Wed Apr 17, 2019 10:44 am
deltaneutral83 wrote:
Wed Apr 17, 2019 10:15 am
FrugalPete wrote:
Wed Apr 17, 2019 10:11 am
Just tagging a question onto this. I got my quote for umbrella insurance($1mil liability), and between that and my car insurance(which also has to increase from increased liability), the premium difference is $700/year. Is this crazy high, because from what I've read it seems like it is?
16 year old kids, pool, speeding tickets recently, any other situation that creates risk for the insurance company ?
Nah none of that, just me and the wife in our 30s, with no negative history. The policy is $450/year, but the agent said our car liabilities will have to go up as well, adding $130/year to each car. Might have to look for a stand alone policy but those are tough to find...
$450 sounds a little high, but no matter where you go for umbrella coverage, you’re going to need to increase the limits on your car policies. IIRC, Chubb is the only company that offers standalone liability policies, and they aren’t cheap. If I were in your shoes, I would shop around for the whole package. We found that companies could give us a better deal if we bought all of our insurance from one place, than if we tried to find the best deal for the cars, then the best deal for the house, etc.

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