Umbrella policy (rentals, car insurance, vehicles, auto)

[Tony22]

Hi, I just wanted to know how this policy works? Can I just get it on my car or do I have to also get this insurance with a house? Also, my insurance just went down. If I get it, will it go back up again? Thanks.

[reed303]

Based on my experience with State Farm, you need to have auto plus house (or renters) policies. Also it doesn't cover autos specifically, it is just general excess liability coverage if you are sued for damages above your regular policy limits. Also I learned it does not add any coverage for a rental car. Also I don't think it affected auto rates at all.

[straight shooter]

Originally Posted by reed303

Based on my experience with State Farm, you need to have auto plus house (or renters) policies. Also it doesn't cover autos specifically, it is just general excess liability coverage if you are sued for damages above your regular policy limits. Also I learned it does not add any coverage for a rental car. Also I don't think it affected auto rates at all.

It does not affect auto rates but you are required with State Farm to have at least $250,000 liability on your autos for the umbrella to cover the excess.

[vmaxnc]

Originally Posted by reed303

Based on my experience with State Farm, you need to have auto plus house (or renters) policies. Also it doesn't cover autos specifically, it is just general excess liability coverage if you are sued for damages above your regular policy limits. Also I learned it does not add any coverage for a rental car. Also I don't think it affected auto rates at all.

This is basically what I remember when I asked my Nationwide agent abotu it.

Originally Posted by straight shooter

It does not affect auto rates but you are required with State Farm to have at least $250,000 liability on your autos for the umbrella to cover the excess.

I don't remember what the amount was but after I'd dropped the level of coverage on my cars my agent said I couldn't get an umbrella. My goal obviously was to improve overall coverage without raising my cost, but apparently the insurance company had that figured out already.

[markg91359]

Umbrella policies are an affordable way to increase the limits of your insurance coverage. Before you purchase a policy consider the following:

1. Will the policy cover both auto accidents and situations covered by your home owners or renters insurance policy?

2. Will the policy increase the limits of your underinsured motorist and uninsured motorist coverages on your automobile? These are first party coverages that are payable to you and family members when you are injured in an accident that is the fault of a third party who either has no insurance of his own or very minimal insurance that does not pay for all your medical bills and other damages associated with an accident. Personally, I have umbrella coverage, but I would not own it if it simply increased my liability limits. I am more concerned about being injured by a bad driver with no insurance or low limits of insurance than I am about injuring someone else. Your insurance agent can answer these questions, but you really have to pin it down and get it in writing.

3. How does the cost of the policy compare with simply increasing limits of certain coverages on your auto insurance policy or your home owner's policy? With American Family, I do not have to buy the highest limits of auto liability coverage to purchase a $1 million dollar umbrella.

4. What are your goals? They ought to be to afford you and your family the highest dollar protection at the lowest cost if you become an accident victim. Some people only see car insurance as protection against a lawsuit from another. That is a critical mistake. Your focus should be on compensation for you and your family if a terrible accident and/or injury occurs.

Your insurance agent--if you have one--can answer all the questions I have raised. Its just one more reason not to buy insurance over the computer or because you think the Progressive Insurance girl is cute on t.v. Insurance is a very serious business. Too few people look at ways to maximize the value of their insurance coverage. You may need it sooner than you think. BTW, I am a lawyer, not an insurance agent.

[nitram]

This should explain it thoroughly:
Umbrella insurance - Wikipedia, the free encyclopedia

[StealthRabbit]

Umbrella WILL increase as you add cars. There is a formula for 'risk factors' and cars / teenage drivers / driving history / claim history all add 'exposures' thus increases the cost (risk) of umbrella.

Umbrellas are 'supplemental' insurance, and have 'deductables' that are covered by high coverage on your primary policies. I need to carry $50k, $300k / $500k basic liability on ALL my vehicles AND house to cover the 'deductible' for umbrella. ALSO be sure you know what you are covering and what your exposures are. You may not need an umbrella if your assets are protected with generic coverage. ALSO your umbrella may not reach to all your exposures (business, LLC, rentals, farm, RV, BOAT....)

Take your agent to lunch once / yr and get the low-down. If you have teenage drivers (to age 25) BE SURE you are covered WELL.