I’m going to talk to my insurance agent about this soon, but wanted to get my head on straight first to make sure I’m not being upsold on anything.
For the last many years, my auto liability insurance has been at 100/300. The DC minimum requirement is 25/50. Recently, for unrelated reasons, I added a $1m umbrella coverage for my house.
It just occurred to me today that the major purpose of the umbrella coverage is to fill in if other insurance policies are insufficient. So, is there any reason why I shouldn’t drop my auto liability coverage to the minimum, and probably save a reasonable amount of money each year?
It doesn’t matter what the DC minimum is; it matters what the umbrella insurance minimum requirement for the automobile liability policy is. Check the policy or ask your agent.
The whole point of an umbrella policy as I understand it, is you have assets that need protection from liability, auto liability limits are low to begin with, and both an umbrella policy and auto liability is relatively cheap. Even if it was a good idea, you probably wouldn’t save much.
As indicated, umbrella coverage works hand in hand with auto and homeowners coverages. You will need the auto and HO limits to be at a certain level to get the umbrella coverage; the auto coverage will need to be at a level well above the state minimum. Your agent will fill you in on it.
Yep. I’d be surprised if the minimum underlying limit is any less than the coverage he’s got, 100/300. Some umbrellas require 250/500 on the auto.
This is true too. Higher liability limits are a little pricey when you first raise them but, if you keep them for a while, they come down, provided you’re not filing claims.
Although, if he bought the umbrella from the same agent he got the home and auto from, I’d be surprised if the agent didn’t consider this when he quoted the umbrella. Umbrellas are usually pretty cheap so he may not have realized.
As far as I know agents won’t write an umbrella unless they have all your autos and home to begin with, it’s kind of a package deal.
Auto liability is kind of strange deal, the state mandatory minimums will be met very quickly in this day and age, with hospital costs what they are, and a litigious society. So the Insurance company cuts a check for the limits and that’s the end of it, for them anyway. Most of us are judgment proof, but if you have assets “they” will go after them. This is why the umbrella policy. It has a lot of bang for the buck because it rides above and beyond the rest of the policy. They are sold in million dollar increments. Maybe $90 or $100 a year for each increment. That’s cheap.
It covers liability around the home as well, and even covers attorney fees in certain circumstances.
Even setting medical treatment aside, state minimum auto insurance limits are too low. It’s not hard to cause more than $15k or $30k worth of damage to a new car, and even easier if there are more than two cars involved. My wife was involved in a multi-vehicle accident caused by a guy who pulled out in front of a truck. My wife’s two-year old car was totaled, and there was significant damage to the truck. The guy who caused the accident had the state minimum coverage, so our “uninsured and underinsured motorist” coverage kicked in and paid for our vehicle.
Add in a hospital stay or extended treatment, and the state minimums are a joke. So nice to pay annual premiums because other people don’t have insurance or don’t carry enough insurance.
Umbrella insurance is usually a great value. Try to get it to include UIM coverage (not all carriers include UIM in the umbrella, but it’s the one coverage you’re really going to want–getting hurt by an uninsured/under-insured person is much more common that it should be)
They are all from the same agent, so that’s possible. But I don’t recall it coming up in the conversation when I got the umbrella.
I do have uninsured and underinsured policies, but when I posted the question I was just thinking of my liability coverage. So thanks for the tip, I’ll ask about that too!
I have an umbrella (1 million) policy with my auto insurer (the lizard people) that kicks in AFTER the 300,000 of the policy is exceeded. So I have 1.3 million coverage, BUT you have to continue to maintain the 300K AND have 300K liability coverage with your homeowners. (Which I think is standard.) So the umbrella AUGMENTS what the minimum requirement (of the policy writer, not the state) is. It does not replace any of it.
I have a different company for my HO policy, the lizard people didn’t care. I think I just had to sign an affidavit to the effect that I had and would maintain said HO policy.