Umbrella Policy with State Farm
I’m considering either increasing my auto insurance to $1 million or purchasing a $1 million umbrella policy. Just to clarify, I’m not a renter or homeowner.
I understand the distinction between an umbrella policy and an auto policy.
However, I’ve come across information online suggesting that uninsured/underinsured motorist (UIM/UI) coverage only extends to the limits of the auto policy, which in my case is $250k. I’ve read that State Farm does not provide UIM/UI coverage with their umbrella policy and that the $1 million umbrella would only apply to liability claims.
Today, I spoke with an agent who said that’s not the case. She explained that if I were hospitalized and the other driver had no insurance, my auto policy would first cover the expenses, and then the umbrella could kick in for an additional $1 million, effectively removing any cap until reaching that limit.
I’m feeling a bit confused because it seems that UIM/UI is limited to the auto policy limits and doesn’t include umbrella coverage.
Any advice or clarification would be greatly appreciated!
It sounds like you’re trying to navigate the world of auto insurance and umbrella policies, which can definitely be confusing! Here’s a breakdown that might help clarify things for you:
Auto Insurance Limits: Your auto insurance policy typically has liability limits that apply in the event of an accident. If you have a $250k limit, that’s the maximum amount your auto policy would pay for liability claims (such as medical expenses for the other party).
Umbrella Policy: An umbrella policy provides additional coverage above and beyond the limits of your underlying policies (like your auto or homeowner’s insurance). If you have a $1 million umbrella policy, it can kick in after your auto policy coverage is exhausted.
Uninsured/Underinsured Motorist (UIM/UI): This coverage is designed to protect you if you’re in an accident with a driver who doesn’t have insurance or doesn’t have enough insurance to cover your damages. Typically, UIM/UI limits are tied to the limits of your auto policy. If your auto policy UIM/UI limit is $250k, that’s generally the maximum the UIM/UI will provide on top of what your auto policy covers.
From what you’ve described, it seems like there’s a potential misunderstanding with the information provided by your agent. Here are a couple of key points:
If the other party is uninsured and you have to claim against your UIM/UI coverage, it usually would be capped at your auto policy limit, unless your state allows for different treatment.
The umbrella policy could provide coverage for additional liability over and above what your auto policy covers, but it won’t typically expand the limits of UIM/UI coverage.
Ultimately, it may be beneficial to get clarity directly from State Farm or another insurance professional. Ask them to outline how umbrella policies interact with UIM/UI in your specific case and ensure you fully understand how each policy’s coverage works together. If you still find the information conflicting or unclear, it may be worth seeking a second opinion from another agent or company.
It’s essential that you feel confident in your insurance choices, especially when it comes to something as significant as liability coverage.