Umbrella insurance without ridiculously over the top car insurance

[GreenSheep]

We just finished setting up homeowners insurance with State Farm for the house we just bought. I asked to add on an umbrella policy, which I used to have when I was single. Back then, it was attached to my homeowners policy, and after I sold that house I was told that I could only keep the umbrella policy if I purchased State Farm's Outrageously Unnecessary Super Premium Car Insurance. So I just declined the umbrella policy since I knew it wouldn't be long before I'd be a homeowner again and it seemed like it could be attached to a homeowner's policy regardless of the car insurance.

At first all went well with State Farm this month. We feel like we got a fair homeowners policy that covers everything we want and nothing we don't. We paid them for our new homeowners policy and the umbrella policy early this month. We haven't moved yet, so we still have our car insurance in our current state, but also with State Farm. Now they're telling me that in order to have the umbrella policy, we have to jack up our car insurance to complete ridiculousness. I drive a 2015 Honda Fit, and he drives a 2005 Honda Accord that he uses like a truck (hauls mulch, drywall, etc.). We're looking to insure against financial catastrophe, not to have every little nick in the paint covered.

Has anyone else experienced this? In general we've been happy with State Farm, and we get a discount for having been with them for 19 years, but I feel like that discount might not be worth it anymore if they're just going to keep squeezing us for money for policies we don't need. Are there other companies that don't do this?

For those who might tell me to just dump the umbrella policy... I think we really should have it. The umbrella itself is cheap, and both of us are in professions that cause people to say, "Oooooh, so you're a rich ______." In general we practice stealth wealth, and we're not multi-millionaires, but people see dollar signs as soon as they find out what we do for a living.

[seattlecyclone]

What are the specifics on the "Outrageously Unnecessary Super Premium Car Insurance?" State Farm was perfectly happy to sell us a $2 million umbrella policy in conjunction with a liability-only $100k/$300k auto policy. That doesn't seem too out of line to me, considering that it's pretty easy to do $300k of damage with a motor vehicle.

[nickybecky1]

We have umbrella insurance through National General that we bought from a local agent. I think this and personalumbrella.com are the only places I found that would do it without having it attached to car insurance. Our problem was a little different from yours in that we save so much using metromile that it would cost hundreds to switch to a carrier like Allstate that could do them both, even with the bundling discounts everyone was trying to sell us on. We did have to get high liability limits, but you can have high deductibles still to manage the cost. Is State Farm insisting on low deductibles too? Raising our liability limits didn't have as much an impact as deductibles.

[GreenSheep]

Well, of course as soon as I wrote this, I received an email from the SF agent with a better explanation! They want us to increase to 500/250/100 (interesting considering we, too, will be in Washington, but maybe it varies by region -- we'll be on the OP), and she explained how there are other discounts here and there for this and that which will actually make it cost almost exactly the same as if we hadn't changed it. So... problem solved, I guess. Thank you two for your responses!

[BlueMR2]

When I was first shopping umbrella insurance, everyone I talked to required 500k auto in order to qualify.  So, I've bumped that up to 500k now.

Still don't have the umbrella I want though.  Quotes are all coming in at between $700-800 per million and the restrictions presented by the terms are pretty ridiculous.  Pretty much have to wrap yourself in cotton and never leave the house to avoid violating the restrictions.  Sigh.

[Dicey]

When I was first shopping umbrella insurance, everyone I talked to required 500k auto in order to qualify.  So, I've bumped that up to 500k now.

Still don't have the umbrella I want though.  Quotes are all coming in at between $700-800 per million and the restrictions presented by the terms are pretty ridiculous.  Pretty much have to wrap yourself in cotton and never leave the house to avoid violating the restrictions.  Sigh.

Agreed. We have it but doubt that it offers the protection it implies.

[nobody123]

I was with State Farm for home / auto for around 8 years, and my rates (despite no claims) kept going up.  I shopped around last summer and switched companies when I was able to jack up my auto to the $500K,  keep my same level of home insurance, add a $1M umbrella, and still save a hundred bucks per year.  It pays to shop around.

[omachi]

When I was first shopping umbrella insurance, everyone I talked to required 500k auto in order to qualify.  So, I've bumped that up to 500k now.

Still don't have the umbrella I want though.  Quotes are all coming in at between $700-800 per million and the restrictions presented by the terms are pretty ridiculous.  Pretty much have to wrap yourself in cotton and never leave the house to avoid violating the restrictions.  Sigh.

Holy crap, $700-800 per million?! Does this stuff just vary wildly in different parts of the country? I'm paying $120 per year for a one million umbrella policy and it didn't appreciably change the amount I pay for Home/Auto. I'm told if I want to go to two million it will be less than $120 more to do so.

[dogboyslim]

The primary exposure to large liability for most people is via their vehicles and at-fault accidents.  The limits SF is asking you to insure is not to protect your own vehicle, it is the limit of liability to protect others from your actions, in essence having the insurer pay these damages vs. you.  The limit required for umbrellas in the industry was for a very long time 100/300.  This means $100k per person, $300k per accident.  So if you get into an accident with someone and its your fault.  If the other car had 2 people in it, one with $200k of damages and the other with $100k of damages, SF would pay $200k from your vehicle policy.  If there were another accident and there were 5 people in the car, each with $100k of loss, the vehicle policy will pay only $300k.  Most companies, I believe SF included, switched this requirement to 250/500 a few years ago, but allowed people with 100/300 to keep the lower limits.  Many of them also put a surcharge on the umbrella policy for people with those lower limits, but they do it by calling it a discount for having higher limits.

At any rate, If you need an umbrella because of your asset base, the higher your underlying auto limits, the more coverage you have, and typically the less expensive the umbrella policy will be.

For the person who saw rates of $700 per million of umbrella, I ask the following questions:  Do you have young drivers in the household?  Are your underlying limits low?  Do you have underlying policies with multiple companies?  Each of these can drive the umbrella rates up pretty high.

[seattlecyclone]

When I was first shopping umbrella insurance, everyone I talked to required 500k auto in order to qualify.  So, I've bumped that up to 500k now.

Still don't have the umbrella I want though.  Quotes are all coming in at between $700-800 per million and the restrictions presented by the terms are pretty ridiculous.  Pretty much have to wrap yourself in cotton and never leave the house to avoid violating the restrictions.  Sigh.

Holy crap, $700-800 per million?! Does this stuff just vary wildly in different parts of the country? I'm paying $120 per year for a one million umbrella policy and it didn't appreciably change the amount I pay for Home/Auto. I'm told if I want to go to two million it will be less than $120 more to do so.

Yeah, that sounds super expensive. I just paid a touch over $200 for a $2 million umbrella from State Farm. Do you have three teenage drivers and a trampoline leading to a poorly-maintained water slide?

[SimpleCycle]

Any umbrella policy will require high liability limits, but should not require anything "over the top" in terms of coverage (collision/comprehensive/low deductibles).  From your post you sound a bit unclear on the different aspects of car insurance.  A low deductible is what I would consider having "every nick in the paint covered" while a high liability limit would be considered protection from financial catastrophe.

Anyway, unless you have high risk situations, umbrella insurance is pretty cheap.  Ours is $150 for $1M and requires $100/$300 auto insurance.

[caracarn]

Yes, we are with Nationwide and when I added my umbrella we had to take all liability limits to the highest level possible, but nothing else was required.

[BlueMR2]

For the person who saw rates of $700 per million of umbrella, I ask the following questions:  Do you have young drivers in the household?  Are your underlying limits low?  Do you have underlying policies with multiple companies?  Each of these can drive the umbrella rates up pretty high.

500(/250 IIRC) on the autos.  Currently just single company (NationWide), have shopped single company and splitting it out without seeing much difference.  No children.  No accidents.  I'm thinking it's just really expensive here.