Umbrella and Auto Insurance Inquiry
I’ve recently started exploring the option of getting an umbrella insurance policy. Currently, I have an auto policy with State Farm that offers coverage of $100,000 per person and $300,000 per accident. My agent mentioned that a $1 million umbrella policy would cost around $725 annually, but I’d need to increase my auto coverage to $250,000. This adjustment would give me a total of $1.25 million in coverage.
Alternatively, I can increase my auto insurance to $1 million in coverage for an additional $550 on top of my current rate.
To give you some context, I don’t own a home or any rental properties, I have no dogs, and I only have one vehicle. My only child is a 10-year-old son, and I don’t anticipate situations that could lead to slander claims. I do have savings and want to ensure that my assets are protected in case of a lawsuit. The agent suggested considering the umbrella policy since for just an extra $200, I’d gain an additional $250,000 in coverage. We didn’t discuss premiums for $2 million in coverage yet, but I plan to reach out to her this week to request those figures.
I’m looking for advice, particularly from anyone who has a similar situation. Would you recommend going with the umbrella policy or just increasing my auto coverage? The agent noted that besides slander, she didn’t foresee other risks of being sued, apart from auto-related incidents.
I’ve heard that State Farm has excellent customer service when it comes to claims, which is why I’m inclined to stay with them, but I still want to compare quotes from other insurers.
Thank you in advance for your insights!
It sounds like you’ve done a thorough job of exploring your options for additional coverage! Here are some points to consider as you weigh the decision between an umbrella policy and increased auto coverage:
Coverage Needs: Think about your current assets and any potential risks. While you mentioned that you don’t have much risk of being sued except for auto-related incidents, an umbrella policy offers broader liability coverage for various situations, including personal injury or property damage beyond auto incidents.
Cost Analysis: The difference in cost between the umbrella policy ($725 with increased auto coverage) and just upgrading your auto coverage ($550) is relatively small. For an additional $200, you’re getting much more coverage with the umbrella policy.
Long-Term Considerations: Even if you don’t foresee needing an umbrella policy now, consider your future situation. Life changes (like buying a home, acquiring assets, or having more children) can pose new risks that an umbrella policy would cover.
Peace of Mind: Umbrella policies often provide an extra layer of security and peace of mind, knowing that you have protection beyond the state minimums or what might be covered through auto insurance alone.
Comparison with Other Insurers: It’s smart to shop around and compare quotes from other insurance companies to see if you can find competitive pricing. Some insurers may also offer discounts for bundling different types of insurance.
Assessing Risk: Since your agent indicated that other than slander, your risk is primarily related to auto incidents, it may impact your decision. However, keep in mind that unexpected situations can arise, and having comprehensive coverage can be beneficial.
In summary, if you can afford the extra premium, the umbrella policy appears to be a worthwhile investment for additional coverage and peace of mind. It’s great that you plan to discuss further with your agent, and getting quotes from other companies will help you make a more informed decision. Good luck!