Questions About Making CA Umbrella Insurance Affordable With a Young Driver
This year, my Farmers umbrella insurance premium for $2 million in coverage skyrocketed from $1,000 to $3,880. We live in California and currently have umbrella, home, and auto policies (covering two cars and two drivers) with Farmers.
My 22-year-old son has an accident on his record from about two and a half years ago, and his car is titled in his name but insured under my policy.
What strategies do you recommend to help reduce the cost of the umbrella insurance? I’m feeling really overwhelmed by this situation.
If he gets his own car insurance, would that protect me from being sued for an accident he causes, considering he’s still a dependent on my tax return?
I appreciate any suggestions you may have. Thank you!
I can understand your concern about the rising cost of umbrella insurance, especially with a youthful driver in the household. Here are some strategies to consider that might help you lower your umbrella insurance premium:
Shop Around: Different insurance companies have different rates and criteria for underwriting, especially when it comes to young drivers. Get quotes from other insurers to see if you can find a more competitive rate for your umbrella policy.
Increase Underlying Coverage: Sometimes, increasing the underlying coverage limits on your auto and home policies can reduce the cost of the umbrella policy. Since umbrella insurance generally requires certain levels of coverage, it may be worth reviewing these limits.
Good Driver Discounts: If your son maintains a clean record moving forward—no accidents or tickets—he may qualify for good driver discounts. Encouraging him to take a defensive driving course could also lead to discounts.
Remove His Vehicle from Your Policy: If your son were to get his own car insurance, he would be responsible for his own coverage, and that could help alleviate some of the risk assessed on your umbrella policy. However, it’s important to ensure that his policy offers adequate coverage, as you could still be held liable under certain circumstances.
Discuss with an Agent: Talk to your Farmers agent about the jump in premium. They might provide insights into why the increase occurred and suggest ways to minimize it. They can also explain how different arrangements (like your son getting his own policy) might affect coverage and liability.
Establish a Clear Financial Independence: If your son becomes financially independent and operates his own insurance policy, this may reduce your liability. However, since he is still a dependent on your taxes, nuances may arise, and you might still face some exposure depending on California law.
Consider Higher Deductibles: If you can afford it, raising your deductibles on auto and home insurance can help in reducing premiums across the board.
Consider a Group Policy: If you belong to any associations or organizations, check if they offer group insurance policies that could yield lower premiums.
It’s crucial to weigh your options carefully and consult with your insurance agent to understand the implications of any changes you make. They can provide personalized advice that caters to your family’s unique circumstances. Good luck!