07
Sep 2008

Liability Umbrellas

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We’re thinking about adding an umbrella liability policy to our homeowners/auto insurance policy.  I talked with our agent about it, and it would cost $216/year to add a $1 million umbrella to our coverage.  We’ve talked about it for ages, but keep forgetting to do anything about it.  I emailed our agent with a few questions, but I think we’re going to go ahead and do it when he gets back to us.  We’re currently paying a total of $1297 a year for our homeowners policy and our car insurance for both vehicles.  I feel like $216/year is a good deal for the amount of coverage we would be getting, although I know that the chances of ever needing that sort of coverage are slim (our homeowners policy already has $300,000 in liability coverage).  But then again, lawsuits are not pretty things, and I’d much rather have an insurance company taking care of the mess if there should ever be one.

Any thoughts?  Do you pay extra for a liability umbrella on your insurance policy?  For those who do, does $216/year sound like a good price for a $1 million policy?

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Category: insurance
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  • http://thunderfingers.blogspot.com chacha

    Actually, that sounds pretty reasonable. That’s less than $20 a month… If it makes you feel more secure, I think it’s worth it.

    I’ve been reading your blog for a while – I love all your green and frugal tips!

  • http://focusorganic.com Stefanie

    I have no idea, but tell me I read this wrong… you pay $1297 a year for homeowners AND insurance on two cars? We pay just under that for JUST insurance on 2 cars… for only a 6 month policy!

  • http://sensetosave.com Kacie

    @ Stefanie, ouch! That’s a pretty high premium. Maybe you live in a state where insurance is really expensive. Have you shopped around to get quotes from other companies in awhile? Do you have tickets or have you been in a wreck recently?

    For one car, I pay $366 every six months and I have full coverage from Geico.

    @FrugalBabe, if you were to add the umbrella policy, would you opt to lower your liability coverage in other categories, or use this as an additional bit of coverage?

    If you felt comfortable lowering your car and home liability limits and went for the umbrella policy, would it save you some money?

    I’m not too familiar with umbrella policies so I don’t know if that would even work.

  • FrugalBabe

    Stefanie – Our homeowners policy is $546/year and we pay $62/month for our auto policy. So that total is for the house and both cars. But, our cars are 17 and 18 years old, so we just carry liability coverage on them. Another of the many perks of driving cars until they die :)

    Kacie – we’re not planning to lower any of our existing limits. Our homeowners policy and auto policy both have $300,000 liability limits built in, so the umbrella policy would be in addition to that. Right now, I’m leaning towards just doing it – I’m feeling like $18/month is a good price for extra peace of mind.

  • http://onefrugalgirl.blogspot.com One Frugal Girl

    We pay roughly $200 a year for a $1 million dollar policy, so $216 is definitely reasonable.

  • M3

    We have an $1 million umbrella policy and it has provided tremendous piece of mind…I think we pay about $200/year…

  • http://www.dontfeedthealligators.com/blog MITBeta @ Don’t Feed The Alligators

    I agree that $216 is reasonable. We pay about $250 for $1 million in coverage, and pay about double what you pay in auto and homeowner’s insurance — which is a market factor more than anything, I’m sure since we both have clear driving records and no history of problems with our homeowner’s policy.

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