Umbrella/Auto Coverage Inquiry
I’ve been exploring the option of an umbrella insurance policy. Currently, I have auto coverage through State Farm set at $100/$300. My agent mentioned that adding a $1 million umbrella policy would cost around $725 annually, which would necessitate increasing my auto coverage to $250k. This combination would provide a total of $1.25 million in coverage.
Alternatively, I could simply raise my auto coverage to $1 million for an additional $550 on top of my existing premium.
To give you a bit of context, I don’t own a home or rental properties, have no pets, and only have one vehicle. I also have a 10-year-old son and am not involved in any activities that could lead to slander claims. However, I do have some savings and want to protect them from any potential lawsuits. The agent suggested that the umbrella policy might be a good idea since for just $200 more, I could secure an extra $250k in coverage. We didn’t discuss options for $2 million plus coverage yet, but I plan to reach out to her this week for those details.
I’d appreciate any advice from others who have been in a similar situation. Would you recommend going with an umbrella policy or just increasing my auto coverage? My agent indicated that aside from slander, she couldn’t foresee any significant risks of being sued outside of auto-related incidents.
I’ve read positive reviews about State Farm’s customer service regarding claims, which is why I’m considering staying with them, but I also intend to compare pricing with other insurers.
Thanks in advance for your insights!
It sounds like you’re doing your homework on this important decision! Here are a few points to consider when deciding between an umbrella policy and increasing your auto coverage:
Cost vs. Coverage: The umbrella policy offers $1 million in extra coverage for only $725 a year (plus the increase in auto coverage), which is a relatively small amount for a significant increase in liability coverage. Compare this to raising your auto coverage to $1 million for $550 extra, which still might not provide the same level of protection that an umbrella policy can offer.
Protection Scope: An umbrella policy not only provides liability coverage for your auto but also extends to other areas like personal injury claims. While you mentioned not being concerned about slander, unexpected accidents can happen, and having that extra protection could be beneficial. It covers situations you might not anticipate, like incidents involving your child or other liabilities.
Future Considerations: You mentioned that you don’t have a home or rental property now, but circumstances can change. Having an umbrella policy could be advantageous if your situation changes in the future, as it would still be in place to provide additional coverage.
Claim and Service Reputation: Since you’re already with State Farm and have heard positive things about their customer service, it may be beneficial to stick with them, especially when building a long-term relationship with your agent.
Shop Around: While it’s great to keep your existing insurer, it’s always wise to shop around and compare quotes from other companies for both umbrella and higher auto coverage. This can give you a broader view of your options as premiums can vary significantly.
Consult a Financial Advisor: If you have specific financial concerns or assets to protect, consulting a financial advisor or insurance expert could provide tailored advice based on your situation.
In the end, both approaches offer benefits, and your choice depends on your comfort level with risk and how much coverage you want. It sounds like you’re on the right path to making an informed decision! Good luck!