Anyone else erminating their umbrella policy?

Question

Until this month, I've had an umbrella insurance policy for years and years.

After responding to the 137th "should I have an LLC?" thread, I was reminded I am swimming a little less protected today.

A $1M policy used to cost $280/yr.  Awesome valu. Then $360. Last year $440. This year $506/yr.  Nah, cancel that.

I still maintain max liability on vehicles and rental houses, but dropped the umbrella policy. We've also reduced by 22 units in this amazing sellers market and have a PM for half the remaining so less risk. Cost to me was outweighing the benefit.

Anyone else flinching at the high umbrella policy premiums? Choosing to terminate, or?

Bjorn Ahlblad · Answer

@Steve Vaughan Congrats on the sales!! We still have a liability umbrella; but much more insurance for a lot less money/yr? We pay 440/yr for a 3 mil umbrella.

Jay Hinrichs · Answer

personally, would not risk not having it..  would just shop if the rate is too high..

Joseph Marghella · Answer

Steve,

Congrats on the sales.  I own a couple of p&c agencies.  I would caution against removing the umbrella, while you are reducing the risk based on frequency, you are still equally at risk for the potential size of a claim on any of the properties.  Your equity only comes into jeopardy if you do not have enough liability coverage.  If you do have your properties in LLCs I would consider shopping a separate umbrella for your rental properties, especially with a young driver increasing the cost of the umbrella.  Also, while in most cases packaging the policies with one company is price efficient, there are companies that specialize in insuring rental properties and may get you a better rate outside your home and auto carrier.

Hope this helps.

Mio Chee · Answer

Has your household situation change over the last years (minor started driving, etc.)? This could greatly affect your premium. My husband is a property and casualty insurance agent who also sells umbrella policies. The latest quote we got for 5M was $1k/yr, so in my opinion, $500 for 1M is pretty expensive. If you own 22 units, I would actually increase to 5M instead of 1M depending on how much equity you have.

Mio Chee · Answer

Sorry, I must have been spaced out. It is actually RLI, not IRA. lol. I believe they do have a limit of investment properties you can own.

Mio Chee · Answer

When we were searching for umbrella, IRA was one of the companies that offered umbrella without having an auto and/or homeowner with them . Not sure if they do business in WA, but it may be worth contacting them.

Steve Vaughan · Answer

I agree Jay. It does make me a little uncomfortable not having it.

I really don't want to switch my auto/home and a couple small landlord policy combo.

I'll see if my other carriers will do it without auto.  Thanks!

Joni Chin · Answer

@Bjorn Ahlblad

What carrier do you have your umbrella policy with ?

I’m looking for an umbrella policy as I now have more properties, and my new insurance carrier only offered 500k liability coverage on each property and I feel that’s too low.

Joni

Anyone else erminating their umbrella policy?

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