Questions About Making Umbrella Insurance More Affordable with a Young Driver
This year, I noticed a significant increase in my Farmers umbrella policy premium for $2 million in coverage—jumping from $1,000 to $3,880 annually. We reside in California and have umbrella, home, and auto insurance (covering two cars and two drivers) with Farmers.
My son, who is 22, has a history of an accident from 2.5 years ago. He owns a car that is titled in his name, but I have added it to my policy for insurance coverage.
I’m looking for strategies to help reduce the cost of the umbrella insurance, as I’m feeling quite overwhelmed with the rise in premiums.
If he were to get his own car insurance, would I still be liable for any accidents he causes since he is claimed as a dependent on my tax return?
I appreciate any suggestions or advice you may have. Thank you!
It sounds like you’re navigating a challenging situation with your insurance premiums, especially with a youthful driver and an accident on record. Here are some suggestions that might help you lower your umbrella insurance costs in California:
Shop Around: Get quotes from multiple insurance providers. Each company has different underwriting criteria, and sometimes you may find a better rate elsewhere.
Increase Auto Deductibles: If you can afford to pay a higher deductible for your auto insurance, it might lower your premiums. This can sometimes lead to a reduction in umbrella insurance costs as well.
Review Coverage Needs: Assess your existing coverages. Sometimes you might find areas to trim or adjust, which can directly affect your premium costs.
Maintain Good Credit: Insurers often use credit scores to determine premiums. If improving your credit score is an option, it could lead to lower insurance costs.
Consider Your Son’s Coverage: If your son gets his own car insurance, as long as he is listed as a driver on your policy, your umbrella insurance may still cover him. However, you should consult with your insurer to confirm how being a dependent and having a separate policy will affect liability.
Discounts & Bundling: Inquire about any discounts you might qualify for with Farmers, such as multi-policy or affinity discounts. Bundling your auto, home, and umbrella policies can sometimes lead to lower premiums overall.
Driver Training Programs: Some insurers offer discounts if your son takes a defensive driving course or other approved driver training programs. This might also help to mitigate the impact of the accident on his record.
Consult an Insurance Agent: A local insurance agent can provide personalized advice and may uncover options specific to your situation.
Regarding liability, if your son has his own car insurance policy and causes an accident, the insurance from his policy would typically cover the damages up to the policy limits. However, if he is still considered a dependent on your tax returns and the claim surpasses his insurance limits, there may still be exposure for you, depending on the circumstances. It’s best to clarify this with your insurance provider.
I hope these suggestions help you find a more affordable route for your umbrella insurance!