Questions About Making California 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 annually. We live in California and currently have an umbrella, home, and auto policy (covering two cars and two drivers) with Farmers.
My son is 22 and has an accident on his record from over two years ago. He owns his own car, which is insured under my policy.
I’m looking for advice on how to lower the cost of the umbrella insurance, as this increase is really challenging for us.
If he gets his own car insurance policy, am I still at risk of being sued for an accident he might cause, since I claim him as a dependent on my taxes?
I would appreciate any suggestions! Thank you.
I understand how frustrating it can be to see such a significant increase in your umbrella insurance premiums, especially with a youthful driver in the house. Here are a few suggestions to help you potentially lower your umbrella insurance costs, as well as some insight regarding your son’s car insurance situation:
Shop Around for Rates: Different insurance companies may have varying rates for umbrella policies. It’s worth getting quotes from other providers to see if you can find a more affordable option. Some companies might offer discounts for bundling policies or having multiple lines of insurance.
Increase Your Auto Liability Coverage: Sometimes, increasing your underlying auto liability coverage can lower your umbrella policy premium. Check with your insurer to see if this is an option and how it might financially benefit you.
Evaluate Your Coverage Needs: Make sure that you actually need the $2 million in coverage. Depending on your financial situation, you might be able to reduce the coverage amount, which could lower your premium.
Consider Your Son Getting His Own Policy: If your son were to get his own car insurance and is the primary driver of his vehicle, this could help lower your costs. As a general rule, if he has his own policy, he would then be primarily responsible for his own car accidents. However, since he’s still a dependent for tax purposes, there can be some legal implications depending on the situation. It’s safest to consult with a legal expert or insurance agent to clarify your liability.
Improve Driving Record: Encourage your son to take a defensive driving course, which can sometimes help reduce insurance premiums upon completion. Also, maintaining a clean driving record going forward can improve rates over time.
Review Discounts: Ask your insurance provider about any available discounts. Sometimes providers offer discounts for things like safe driving, completing an educational course, or even having certain security features in your vehicles.
Consider Higher Deductibles: If you can afford a higher deductible on your auto/home policies, this may lower your overall premium costs, which could indirectly affect your umbrella policy.
Review Your Current Coverage Limits: Make sure you are not over-insured. If you have extra protections that you might not need, consider adjusting them.
If you incorporate these suggestions, you may be able to lower your premium significantly. Always consult with your insurance agent about the specifics of your coverage and potential liabilities related to your son’s insurance situation. Good luck!