We Finally Got an Umbrella Insurance Policy

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Umbrella InsuranceBack in 2006, in the first few years of running Bargaineering, I asked you all whether I needed an umbrella insurance policy. Practically everyone said yes. I even went as far as asking GEICO for a quote on a $1 million dollar umbrella insurance policy, which would’ve cost me $124 a year – or about on par with renter’s insurance.

It’s so cheap, probably because it’s not used very often. You have so many other insurances “in the way” that you don’t get to the umbrella policy unless things get pretty bad. Then again, that’s why you get insurance. It’s to protect you from the “pretty bad” stuff right?

So last week, after consulting with a financial adviser and going over the things that I might want to look into, I asked my State Farm agent for a quote. The price for $1 million of coverage was $142 a year. Add an additional million and it’s just another $71. It’s more than what GEICO quoted me six years ago but we also get $65 off our auto insurance for a net increase, on two million, of $148. I don’t know if GEICO included a multi-line discount in their original quote so this might not be an apples to apples comparison.

I’m not one to be easily swayed by the fear argument (since it took me six years to get a policy that took five minutes to implement) but one thing did resonate with me from the last post – monkeyjoe saying “All it takes is one bad accident on a slippery day for your wages to be garnished for the rest of your life.”

Given the cost and the protection it affords, it’s a lot like renter’s insurance. You could live happily without it, as many renter’s do, but all it takes is one unlucky scenario and you’ll wish you had it. I’ll just chalk it up to good luck that I didn’t need it the last six years… and will smile on my good fortune if I don’t need it for another fifty. 🙂

Do you have umbrella insurance? If you do, what pushed you to get it? If not, why not

(Photo: Loca Luna / Anna Gay)

{ 16 comments, please add your thoughts now! }

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16 Responses to “We Finally Got an Umbrella Insurance Policy”

  1. jestjack says:

    It’s better to have it and not need it ….then to need it and not have it…Thanks for the timely article…didn’t know an umbrella policy was so cheap!

  2. MonkeyMonk says:

    We’ve had an umbrella policy for a few years now and I hope to never use it.

    If you’re a high net-worth individual, having an umbrella policy should be a no-brainer since if you do actually need one the cost is so inexpensive as to be completely negligible.

  3. Anonymous says:

    Great article but…I was so excited because it was Side Gig Thursday!!!!!!! 🙁

  4. Luke says:

    I’ve been in the process of getting my umbrella policy set up and the cost for me is significantly higher… also getting more coverage… but I thought it was crazy. GEICO doesn’t do business in my state…. apparently, unless I get a specific invitation for their car insurance. Which I did not.

  5. steve says:

    My wife and I just got our umbrella policy (also w/ State Farm) put into place this week too. One of those things you hope never to use… but will be glad in case it’s needed.

  6. AndrewB says:

    My Geico $1 million umbrella policy costs $348.47 for myself and my wife. We live in FL, have 3 vehicles, 4 rental properties and the house we live in. We also have excellent credit. I wonder why my rate is so much higher than yours?

    • Long says:

      Is it because of the rental properties? They may consider you to have higher risk because of potential liability concerns.

  7. Intend to shop for policy, good reminder.

  8. admiral58 says:

    I have an Encompass $1mil policy, which is around $96 in Pennsylvania. Also have my car insurance through them.

  9. Joe says:

    I had been considering getting umbrella policy as well. But that required me to get more insurance coverage on auto policy for my 9 year and 8 year old cars that are insured through Geico. I currently have liability only with slightly higher property damage than the state minimum. Did you have to upgrade auto policy to get umbrella? At the cost that is mentioned, is seem well worth getting the policy.

    • Jim says:

      That’s one of the downsides, I had enough coverage on our two cars so it wasn’t an issue. In the end, you are getting more coverage so it’s not like the money is wasted.

  10. Jason says:

    My wife and I have had ours for some time now. I worked for one of the bigger companies and was in claims for a good number of years. I was able to see first-hand how much an accident can cost the policyholder, even if the limits are exhausted. Umbrella policies are such a small cost for a large amount of coverage that it is worth it for the peace of mind that it provides. In my opinion, insurance is purchased to cover a loss that one does not expect to have. In todays litigious society, it is not a bad thing to have in the event you would need it.

  11. Long says:

    I’m one of those who have been delaying getting umbrella coverage. I guess people need to know that vehicles insured will need near, if not full comprehensive coverage. There are also some quirks.

    I have USAA and they will not sell you their own umbrella policy if you have certain types of dogs (i.e. German Shepard, Akita). They did, however, refer me to a partner company that will cover us (our dogs are mixed breed and are therapy dog trained, but that didn’t seem to matter).

    Also, umbrella insurance doesn’t cover liabilities involving professional activities. My wife works in health care and she would still have to retain the specific liability insurance for her industry.

  12. Susan says:

    If you have a new teenaged driver in your house and purchase this policy (particularly in the NY NJ CT area), prepare to spend quite a bit more for this policy. We were quoted $700/year.

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