Seeking Advice on Umbrella vs. Increased Auto Coverage
I’ve been exploring the option of getting an umbrella insurance policy. Currently, my auto insurance with State Farm provides coverage of $100,000 per person and $300,000 per accident. My agent quoted me approximately $725 per year for a $1 million umbrella policy, which requires me to adjust my auto coverage to $250,000. This combination would yield a total coverage of $1.25 million.
Alternatively, I could simply raise my auto coverage to $1 million, which would cost an additional $550 on top of my current premium.
To give you context, I don’t own a home or rental property, don’t have any dogs, and I only have one vehicle. My family consists of myself and my 10-year-old son. I also don’t foresee myself in situations that would lead to slander claims. However, I do have savings, and I want to protect that from potential lawsuits. My agent suggested that the umbrella policy might be a wise choice since, for an additional $200, I could get an extra $250,000 in coverage. We didn’t delve deeply into options beyond $2 million coverage. I plan to follow up with her this week to get premium details for coverage over $2 million.
I’d love to hear any advice from those with similar situations who have navigated the choice between an umbrella policy versus simply increasing auto coverage. We discussed various scenarios, and apart from slander, my agent couldn’t identify any major risks beyond auto-related issues.
I’ve read that State Farm has excellent customer service regarding claims, which is why I’m inclined to remain with them. However, I still need to compare quotes from other insurers.
Thanks in advance for your insights!
It sounds like you’re gathering a lot of useful information about your insurance options, which is a great first step. Here are a few considerations that might help you decide between increasing your auto coverage and opting for an umbrella policy:
Cost vs. Coverage: As you mentioned, increasing your auto coverage to $1 million will cost you $550 a year, while the umbrella policy would cost $725. The umbrella gives you broader coverage, not just limited to auto incidents. If you do end up facing claims that aren’t related to your auto, the umbrella could provide additional peace of mind.
Risk Assessment: You noted that you don’t foresee being sued for any reasons outside of auto incidents, yet it’s hard to predict what can happen. Umbrella policies cover more situations (like accidents that happen at home, personal injury claims, etc.), which might be worth considering even if you currently feel low risk.
Asset Protection: Since you mentioned having some money in your bank account, an umbrella policy is especially beneficial for protecting your assets from being vulnerable in the event of a large judgment against you. If you’re concerned about losing that money, the broader coverage could provide extra security.
Future Changes: Consider potential changes in your life. If your situation changes, such as having more assets or a home in the future, having an umbrella policy might provide a safety net for those circumstances.
Comparing Insurers: It’s smart to shop around and compare quotes from other insurance companies. While State Farm has a strong reputation, other providers might offer competitive rates or better coverage options that suit your needs.
Discuss with Your Agent: Before making a final decision, discuss all your questions and concerns during your upcoming meeting with your agent. It might help to lay out scenarios to see how coverage might work in different situations.
Ultimately, you want a solution that balances cost with adequate coverage, providing peace of mind for you and your family’s financial security. Good luck with your discussion!