Many people immediately dismiss the idea of getting umbrella insurance because they don’t want to spend more money on insurance. We get it! You’re already paying for several different types of insurance. Why would you want to increase your bill to get additional, optional insurance that you may never need to use?
But what if we told you umbrella insurance is probably much more affordable than you think and worth it for the extra protection?
In this article, we’ll give you an estimate on what umbrella insurance can cost, get into the factors that influence it, and give some real examples of insurance premiums for Massachusetts residents.
What is umbrella insurance?
Umbrella insurance is extra liability coverage that provides protection beyond existing limits and coverages of your home and auto policies.
Umbrella insurance generally provides liability coverage for:
- Damage to property
- Certain lawsuits
- Personal liability situations
What an umbrella insurance policy costs:
The cost of an umbrella insurance policy can vary based on a number of factors but you can expect a $1 million policy to cost between $160 and $500 per year.
As you increase policy limits beyond $1 million, the premium cost increases in smaller increments.
For example, a $2 million policy might only cost 1.8 times the cost of the million-dollar one (rather than double), a $3 million dollar policy might cost 2.55 times the million-dollar policy (rather than three times), and a $10 million dollar policy might cost 8.9 times the million-dollar policy (rather than ten times).
Factors that influence the cost of your umbrella insurance:
The cost of each umbrella insurance policy will vary from person to person, based on many factors. Here’s what you can expect to play a role.
Umbrella insurance limits:
As we mentioned above, you can buy umbrella insurance in increments of $1 million dollars.
The higher your limits, the higher the cost of your umbrella insurance policy.
When calculating a quote, insurance carriers will evaluate all of your exposures to see how many opportunities for the risk you actually have. The higher your risks, the higher your premium. Some of the things carriers will consider are:
- Number of properties
- Number of autos
- Driver history
- Number, age, and experience of drivers
- The number of watercraft, ATVs, side-by-sides, golf carts, etc.
- Pools, trampolines, playsets, etc.
- Number and breed of dogs
- Your occupation
- Other non-compensated positions such as participation on a non-profit board
Your insurance carrier:
Each insurance carrier rates exposures differently, so the cost of a policy can vary based on the carrier it’s quoted with. We’ve seen umbrella insurance quotes for the same property vary by a large amount.
That’s why we always stress working with an independent agent who partners with multiple carriers who can find the right coverage solution for the right price.
Umbrella insurance premium examples:
You know the factors that influence price, but you probably still don’t have a clear idea of what exactly that means for you. To help give you some more insight, we’ll give you some specific examples of some of the home insurance policies we’ve issued recently.
- A $1 million policy for a McKinney, TX individual with 1 home, 1 driver, 1 vehicle: $176
- A $1 million policy for an Arlington, TX individual with 1 condo, 1 driver, 1 vehicle: $200
- A $1 million policy for a North Richland Hills, TX family with 1 home, 2 drivers, 2 vehicles: $240
- A $1 million policy for a Southlake, TX family with 1 home, 4 drivers (2 teenagers), and 3 vehicles: $345
- A $5 million policy for a Tyler, TX family with 2 homes, 2 drivers, 2 vehicles: $687
For the best price, work with a reputable agent
If you’re looking for the right price for your umbrella insurance, you’ll want to make sure you’re working with a reputable insurance agent.
An independent insurance agency can shop around your policy among all the carriers they recommend to make sure you are getting the best deal on your umbrella insurance policy.
If you have any questions feel free to reach out to me at Johnathan@riskwell.com, or by calling 469-678-8082.