r/Insurance • u/ComfortableChannel73 • Aug 26 '26
Home Insurance Is an umbrella policy worthwhile?
I’ve carried an umbrella policy for $1M for quite a few years, but just got my bills for umbrella, homeowners and auto and everything went up, with a big jump for the umbrella policy. I’m wondering if I should drop it, and just raise the liability limit on the auto.
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u/kevhouston740 Aug 26 '26
It isn’t, until it is needed.
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u/PedroNorthCA Aug 26 '26
One of those things that if you have it, you'll never use it, but if you don't have it, something is going to happen and you'll need it
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u/TheGrouchyGremlin Aug 26 '26
Tbf, if someone tries to sue me for a lot more than my insurance would cover, then they wouldn't be able to get jack shit anyways.
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u/Melodic-Maker8185 Former Underwriter, CPCU Aug 26 '26
Then likely you don't need an umbrella policy.
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u/Colonel460 Aug 26 '26
The reason umbrellas have went up is claims are being paid out . When I started out 45 years ago you could get an umbrella for $100 a year .
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u/InigoMontoya313 Aug 26 '26
My first umbrella policy was around $100 for a $1M policy! Ugh.. wait.. does this mean I’m getting old? No…
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u/superredditor6789 Aug 27 '26
My umbrella is still less than $250.
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u/Dazzling-Round-9187 Sep 02 '26
Would you mind sharing the company?
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u/ithrax Aug 26 '26
Umbrella is basically required if you have assets.
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u/insuranceswearjar Aug 26 '26
Or if you have a lot of exposures - I stand to inherit a lot as an only child, but I have a young child and lots of pets that create an increased risk. I’d rather have coverage in place for $300 a year in the event a freak accident occurs and I can’t pay for it easily out of pocket. It’s a fraction of the cost and gives my family peace of mind.
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u/Impressive-Peak-6596 Aug 26 '26
I think it kind of depends on the assets. Does a middle class earner with a house that has 1 million liability home insurance and 500k auto need an umbrella?
I don’t disagree it’s probably always good idea if you can afford it, but umbrella prices are skyrocketing
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u/solxap Aug 26 '26
Same concern. My umbrella is $$100/month now. Mediocre $500k house. A couple hundred thousand in a 403b. Not enough cash on hand. I drive a 22 year old Toyota. My wife has a 2020 Toyota and - here’s the kicker I’m sure - we have a 16 year old with his learners permit and a 2011 Jeep Wrangler that he saved up for and is planning to drive when he gets his full license.
When that happens I’ve been told my auto insurance premium will likely double to nearly $600/month. We have excellent credit. Crazy.
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u/DeepPurpleDaylight Aug 26 '26
When that happens I’ve been told my auto insurance premium will likely double to nearly $600/month
No reason at all why a kid with a part time job can't come up with $75 a week to cover his part of the insurance.
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u/solxap Aug 26 '26
Oh he'll do his part. He saved up for half of the Jeep, gets good grades and is also taking concurrent college courses while in high school. He also takes care of his own music lessons and we pay for athletics. It's just a crazy amount of money.
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u/AlfuegoDeMellopie Aug 26 '26
Not crazy if your kid t-bones me in an intersection.
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u/solxap Aug 26 '26
And that’s why I keep paying it.
It’s probably my wife that will get you though. Lol
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u/AnxiousMove9668 Aug 28 '26
Umbrella is $100 a month? I have had a 1M umbrella for 15 years and never paid more than $125 a YEAR. Currently mine is $104 a year.
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u/solxap Aug 28 '26
Yah crazy. I just got off the phone with my Allstate agent to discuss and they moved me from their policy to a 3rd party USLI policy. More coverage for a little under $350/yr.
We all have various factors that affect our rates. HCOL and teen drivers make a difference.
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u/ithrax Aug 28 '26
Mine is also $350/yr.
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u/AnxiousMove9668 Sep 01 '26
Funny we are just talking about this. I got my renewal today it went from $104 to $166/year. That is a 60% increase in 12 months.
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u/DreaminTurquoise Aug 30 '26
What company please?
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u/AnxiousMove9668 Aug 30 '26
I moved to Tennessee a couple of years ago I am currently with Erie. That being said in Colorado I was with American Family and Acuity over the years and they were also under $125/year there.
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u/enriquedelcastillo Aug 26 '26
I’ve had an umbrella policy for years, for the reasons listed in other comments here. But what I’ve never really understood is if “protecting your assets” with a policy means anything. Doesn’t it just mean they go after the value of assets + umbrella policy instead of just assets?
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u/jagscorpion NC Independent Agent - P&C Aug 26 '26
Generally the goal is to make your liability limits attractive enough that they just take them instead of trying to fight for more, but for a big enough claim technically nothing is off the table.
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u/Ok_Elephant2777 Aug 26 '26
As an agent, I recommend umbrella policies to my clients, and no, the commission on a $250 premium is not going to make me rich. But it’s part of the job if I’m doing it correctly - helping people protect their assets. I compare it to the reserve chute a skydiver packs for his jump. You hope you never have to use it, but it’s a comfort to know it’s there. And if and when you do need it, there’s no substitute.
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u/Waste-Cycle2868 Aug 26 '26
I faced a civil lawsuit several years ago for something I didn’t even do being a volunteer.
Having the umbrella if you have assets is a good idea and I’m not an agent or lawyer.
I’m retired and absolutely will never volunteer for anything ever again after what I went through.
The lawsuits are beyond out of control in our society
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u/Knightmare4469 Aug 26 '26
Before you dump anything, you should call and make sure there aren't discounts you aren't taking advantage of
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u/thelmanarcissus Aug 26 '26
If you cancel your umbrella and raise your auto insurance to compenate, what happens if someone falls on your property and sues you?
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u/KiniShakenBake P&C/L&H Aug 26 '26
I dunno... How much do you value your future income, assets of any value, home equity, etc...?
Would keeping the other party from taking them in the event that you were at fault in a gnarly accident of the auto or other variety be worth the cost of the policy?
Only you can decide.
I have a 2 million umbrella and will never let go of it.
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u/First-Philosopher596 Aug 26 '26
On one hand paying $1000+ a year for one for 30 years is going to be cheaper than the $1 million liability suit if you ever have one. That said if you never have to use it it’s a waste of money. But that’s kinda the long and short story of insurance in a nutshell.
Insurance companies are saying they are seeing bigger judgements and as a result Umbrellas are being used more often. I’ve been in the industry for 10 years now and I have seen 2 umbrella claims now. Both within the last year.
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u/demanbmore Former attorney, and claims, underwriting, reinsurance exec. Aug 26 '26
Depends what you have to protect, both now and what you may acquire and earn over the next 10-20 years. Judgements are collectable for at least 10 years just about everywhere, longer in many places. Get an excess judgement against you today, they may be able to come after you a decade from now.
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u/Impossible_Base_3088 Aug 27 '26
That is a great point.
Question: would an umbrella cover a successful claim against you if you purchased the policy after the incident occurred? If that makes sense.
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u/cumomlady Aug 26 '26
I had this happen to me and we ended up raising our limits on auto/home over renewing the umbrella policy. My insurance agent was surprised that it was pennies to increase our liability coverage on the house. Auto rates had lowered a bit, so it made it reasonable to just raise my liability limits there too. I have teen boys, so auto insurance is expensive. I put the devices in their cars that tracks speeding and hard braking. I forced everyone to do a defensive driving course. We put the teens in newer sedans with extra safety features.
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u/Impossible_Base_3088 Aug 27 '26
Boy given your nickname, I’d expect you to have different encouragement concerning your kids driving: fast cars and fast women.
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u/teresajs Aug 26 '26
My umbrella policy premiums increased quite a bit this year. When I asked my insurance agent, they said that umbrella policies were increasing due to the higher awards from court cases (someone gets injured or killed and the court awards millions of dollars and the umbrella policy has to pay out that money).
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u/Puzzleheaded_Mine176 Aug 26 '26
Actuary here who has worked on personal umbrella. Your agent is right and there are companies losing money hand over fist writing umbrella
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u/Jujulabee Aug 26 '26
It's worth it if you have assets you want to protect.
Of course your risk level depends on your situation.
I carry it but I am at low risk honestly for being involved in a huge auto accident because I live in a city and don't drive much - don't drink - and any accident would almost certainly be a federal bender at relatively low speeds.
On the other hand I live in a high risk condo and so am at high risk for causing significant damage to other units by a flood or something similar.
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u/cbkarma Aug 26 '26
If your in a car wreck that is your fault and the other party is injured you will be glad you have an umbrella.
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u/Born_Base_4191 Aug 26 '26
Umbrellas have gone up big time used to be 3 to 500 bucks. Now theyre 500 to 1500 everywhere. Ive had some customers drop the unbrella and raise their auto to like 1 m auto liability as a cheaper alternative but that exposes you on the other lines. Id say keep it.
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u/Herbisretired Aug 26 '26
My umbrella was $237 this year and it went up $17 in a year which I don't find ridiculous for the amount of coverage
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u/AlfuegoDeMellopie Aug 26 '26
Only buy insurance if you don't have enough money sitting in the bank to pay a claim.
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u/Ienjoyduckscompany Aug 26 '26
You could call your agent and discuss options. I wouldn’t just raise the limits on auto though. Should be pretty cheap to increase them on your home insurance. If you have a lot of vehicles and multiple properties, it may be more cost effective to keep the umbrella though. Also ask your agent if you’d lose any coverage by dropping the umbrella, such as libel claims, false imprisonment, etc., and determine if those coverages are important to you.
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u/insuranceguynyc Aug 26 '26
Only you know what your financial situation is, and whether an umbrella is worth it. It apparently has been worth it until now, so what has changed other than the price?
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u/Melodic-Maker8185 Former Underwriter, CPCU Aug 26 '26
Do you have assets you want to keep? Then I'd keep it. That said, if you're dissatisfied with the premium, get some quotes and see what you can get elsewhere.
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u/AmphibianNo9133 Aug 26 '26
Umbrella police up everywhere.
My investment guy at Morgan Stanley said he never had a question about them and pricing but a lot of clients were asking because of increases.
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u/Mid30sCouple Aug 26 '26
I've been searching for an umbrella policy here in Florida and can't find anything... Would appreciate any suggestions. Best I could find was $1m for $1300/yr and they refused to go higher since I have a young driver.
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u/JF44130 Aug 27 '26
Even without a lot of assets currently, the biggest reason to have an umbrella, IMO, is the additional UM/UIM coverage. $500k in coverage from an auto policy isn't going to last very long if you're completely disabled and/or have significant medical expenses from an accident.
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u/Impossible_Base_3088 Aug 27 '26
Why don’t people just carry lesser auto insurance and larger umbrellas? Looking at the numbers.
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u/grimzecho Aug 27 '26
Most umbrella policies require certain, higher liability limits for auto and home.
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u/Ducat748 Aug 27 '26
I’d dump my collision coverages before I’d get rid of the umbrella. I’m an agent but i was a litigation/claims manager for years in the old days. We’ve been writing $1 m ill ion umbrellas for 30+ years. These are no longer adequate in my professional opinion. I’d eat at Taco Bell a few times a month to keep the umbrella. Increase it as well. Good luck.
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u/peterpreNW Aug 27 '26
Unfortunately, people sue over just about everything, and an umbrella policy can provide an extra layer of protection for your assets if you’re found liable. Each insurance company prices umbrellas differently, so it may be worth shopping around through an insurance agency before cancelling your umbrella policy. You might be surprised at the difference in premium.
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u/abidingexpediencynow Aug 29 '26
Reading posts on this subject in the early retirement forum umbrella policies have been spiking. My agent remarked that there are few companies even writing policies.
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u/beccam12399 Aug 26 '26
the only way anyone could actually answer this is if they could see into the future. are you planning on having a catastrophic loss soon? no one usually does ..
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u/jagscorpion NC Independent Agent - P&C Aug 26 '26
There's plenty of regulation. What are you basing your critique on, other than feelings?
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u/ChutneyWhatney Aug 26 '26
If you have assets, keep the umbrella.