$1M Umbrella Policy via Geico/RLI: is $400/yr fair? Is this process normal?

[painkiller]

My total net-worth is on-track to exceed $500k by the end of the year. I have car and renters insurance via Geico, with car insurance liability and uninsured motorist coverage both at $500k. So I decided to go ahead and figure out an umbrella policy

I couldn't do it online with Geico, so I called and spoke with an "Umbrella Specialist". She asked a couple basic questions and then immediately took me through a quote process for a $1M umbrella policy. With ten minutes of misc. questions she quoted me $400 / year for a $1M policy from another company, RCI.

She immediately asked if I'd be paying with card or check or yada yada. Very pushy. I told her I'd like to think it over, get a copy of the quote, and get a copy of some sort of documentation about the policy -- so I know what I'm buying. I also told her that $400 sounds high compared to what I'd heard from others. I've heard more like $150-200 for a $1M policy. She went on a brief tangent about how this policy is different. It didn't make much sense, but then again I didn't have a copy of any details. She ended up emailing me a copy of the quote, but ghosted me since I asked for a copy of the policy documentation.

So, that leads me to 3 questions:

1. Is $400 / year for a $1M policy a fair price? I have no dependents. I rent. The only physical property of any significant value I own is a vehicle valued at around $15k. Everything else is savings and stocks.
2. Is it normal to purchase a policy without seeing any documentation?
3. Are there any other companies where the process is less opaque? I don't want to switch car and renter's insurance, but so far Geico's process has been very opaque.

TIA

Edit: Here's my exact quote from RLI (copy/pasted/formatted from PDF):

$1 Million	$406	$0	$406
$2 Million	$739	$0	$739
$3 Million	$988	$0	$988
$5 Million	$1,300	$0	$1,300

Limit
Policy Premium
UM/UIM
Total Annual Premium

Quotation is based on the following information:

1 = Vehicles

0 = Residential Properties

0 = Watercraft (other than Personal Watercraft)

0 = Personal Watercraft

1 = Drivers

0 = Inexperienced Drivers

0 = Drivers age 70 and older

0 = Violations

0 = At-Fault accidents

0 = Antique vehicles

0 = Drivers licensed < 1 year or non-U.S. license

0 = DUI/DWI

0 = Acres

0 = Properties outside U.S.

0 = Drivers age 21 and under and/or 80 and over with incident

No = Drivers over age 80

No = Uninsured/Underinsured Motorists Coverage

Edit 2: Based on some feedback, I did some Reddit sleuthing to find local recommendations for agents and have reached out to a few. Thanks all for the feedback.

 

[leolion]

@painkiller That seems pretty standard for price. Umbrellas are for excess liability coverage, not properly coverage. I’m not really sure what you’d want to see in the policy as long as it’s a full follow form policy, it shouldn’t be much of an issue. Maybe just ask to see the exclusions. Usually a company will make you buy primary auto and renters with them if they sell you an umbrella.

 

[painkiller]

@leolion Thanks.

I guess I'd heard of much lower prices in the past. For example

> An umbrella policy with $1 million in coverage costs about $150 to $300 per year, according to the Insurance Information Institute.

From nerdwallet in Sep 2021: https://www.nerdwallet.com/article/insurance/umbrella-insurance

 

[leolion]

@painkiller Interesting - I have one from Allstate that’s $350 and my mother has one from Liberty for around $400. Regardless, I like the claims handling I’ve had from Allstate so I won’t switch over a small amount that could theoretically be saved elsewhere.

 

[resjudicata]

@painkiller My $1M policy with USAA is $125, though the underlying limits are already $1M. $400 seems high to me, but you wouldn't really know without shopping around.

GEICO and Progressive are car insurers, so my understanding is that when you buy non-car products like homeowners or umbrella coverages from them they farm it out to 3rd parties and each vendor probably makes a markup on it. More middlemen.

 

[lastservant]

@painkiller I like NerdWallet as a general information source but their information about individual carriers come across as fact but are OFTEN incorrect.

I'd like to see them change their language as they're clearly not getting the insider info they pretend to.

 

[peichung]

@painkiller Check personalumbrella.com

Other than that, the only advice I’ve got would be to get a quote on the PLU from Nationwide, Travelers, or maybe call an independent shop in your local area and ask for quotes from all the carriers who will write a single line umbrella. I have personally never used Geico, but that is definitely a LOT for the household you’ve just described. I find that absent credit or claims issues, most of the time $250/yr per $1M in coverage is about as steep as they run (usually). Can’t say I’ve ever seen a $400.

What’s more is as long as you have an auto and renters policy through Geico, you’ve probably maxed out the multi line account discount they offer, so it won’t make a difference if you buy that product elsewhere. Just make sure the limits on all your Geico business meets the required underlying limits of the umbrella.

Smart move getting one though. You wouldn’t believe some of the unlucky shit that happens to very normal people every day. Whatever your asset value equates to (liquid and otherwise), keep your umbrella just above that number so if a net worth check were ever run on you, lawyers have every reason to go after that policy and not after your stuff.

 

[painkiller]

@peichung Thanks

Check personalumbrella.com

How do you recommend using that site? It looks like it's for brokers and agents.

I find that absent credit or claims issues, most of the time $250/yr per $1M in coverage is about as steep as they run (usually). Can’t say I’ve ever seen a $400.

Yeah, that's pretty much what I've heard.

What’s more is as long as you have an auto and renters policy through Geico, you’ve probably maxed out the multi line account discount they offer, so it won’t make a difference if you buy that product elsewhere.

Thanks. That's good to know. That's actually what I found by going through the RLI quote on my own.

 

[peichung]

@painkiller Shoot, for some reason I thought the website offered a self-service quote but it looks like that’ll be a job for an independent agency too. Most should have access to it!

 

[wiggo]

@painkiller

RLI

how's RLI for umbrella coverage? it's through GEICO, any good/bad?

 

[olenihc]

@painkiller I agree with most of the comments that if you are buying umbrella it’s best to spend some time consulting with some independent brokers.

In the interim, is $100 in premium really worth it for you to delay binding coverage? You’re not committing to a renewal and it’s possible shopping around will result in a similar premium.

You can bind coverage now and then shop around knowing your assets are protected.

For what it’s worth I work in claims and post Covid settlements have definitely gone up.

 

[susansusan]

@painkiller I pay 210 a year through state farm. Not sure what documentation you are looking to see, or what questions they asked. I love seen umbrella policies as high as 5 or 6 hundred

 

[jriz]

@painkiller If you're at that point, working with Geico seems odd. You should be working with an agent who can help you better than the lady on the phone at a call center. Love our call center folks, but if you're looking for an umbrella, you should do yourself the favour of sitting down with an actual agent to do some good work.

Let's start with the fact that you don't really realize what an umbrella covers or when you should get one... You talk about not owning much, but having a significant net worth. And you also don't mention future wages which an umbrella also addresses. You would seriously benefit from an agent consultation.

That said, there could be any number of reasons for the quote being that high - starting with your state. What is astronomical in one state is just your average umbrella cost in another. An agent can explain this to you.

 

[painkiller]

@jriz Thanks

Let's start with the fact that you don't really realize what an umbrella covers or when you should get one...

What am I overlooking?

By year end I will likely own over $500k of cash and equities. That exceeds my auto liability. And yes, I'll earn more in the future. I guess I assumed that's a given.

Do you have recommendations on how to find a good agent? Frankly, I already find this industry extremely opaque, so I'm hesitant to reach out to yet another middleman to "advise" me.

 

[lastservant]

@painkiller

Frankly, I already find this industry extremely opaque, so I'm hesitant to reach out to yet another middleman to "advise" me.

You need one more than you know. Call a few and set an appointment.

 

[jriz]

@painkiller I recommend you sit down and talk with a few independent folks and a few who have the name of the company on the sign. You don't have to actually meet with them. Usually a quick phone call would be enough to get a feel for them. They should do some sort of asset analysis and then some recommendations.

You may not be overlooking anything, and you may be. You'd have to share far more than you should be sharing online with strangers on the internet for any of us to say. By the time you get to having an umbrella, though, you should be making sure everything is covered correctly according to what can be attached in your state.

Some people want a very perfunctory agent. Others want someone who is easier to talk to and asks deeper questions. Different agents have different approaches and ways of working with their clients. You'll find one that jives with how you'd like to work with your insurance. Work with them. They are the key to the opacity you complain about. You have a job that seems completely opaque to everyone who doesn't do your job. Well... so do insurance agents.

What's more than a little ironic is that insurance is completely bound by policy and regulation. You have 30 days (usually) to give a policy back and get all your money back after you buy it in most places. The entire obligation is spelled out by highly regulated contract, and you have a copy of it. It may not be the most understandable language in the world, but it's very definite and as clear as day. It's been hammered out by many, many lawyers and insurance regulators to get to the language in your policy that governs everything. Nothing could be more transparent than that.

It is DENSE, though, and hard to wade through. That's where the agents come in. They can help you make sure you get the right policies with the right coverages for you.

 

[joerich75]

@painkiller Too expensive try getting a quote from another insurance company.

 

[godjoy]

@painkiller I will echo what others say, find a local independent agent. I see you’ve commented that you don’t need another middleman but imo an agent is a one stop shop middleman. They have access to several prices for the same product and also understand what each policy and company covers etc. you’re a full account customer who seems to understand protecting assets etc. stop messing with geico, build a relationship with a local agent. A good one is soooo helpful. Ask around check reviews on the google etc. I’ve been with my agent for over 15 years and he makes everything easy and this is coming from someone who makes a living working in insurance. Yes you pay a little more working with them but they aren’t a call center and you typically pay for what you get service wise with insurance.

 

[evolveman]

@painkiller Seems high to me but insurance is not one size fits all so you can't compare your rate to another person's. Some factors considered for an umbrella:
-Number and ages of household members.
-Driving history (major/minor convictions), accident history. My company looks at past 5 years of driving history.
-Vehicle to driver ratio
-Property characteristics (how many properties you own, swimming pools, short term rental properties, rental properties)
-Watercraft, motorcycle ownership
-Insurance credit score

In my experience, a 1M umbrella ranges from $120-$250 per year BUT our underwriting guidelines are very strict, 50% of ppl that apply for an umbrella will get declined, mainly due to driving history.

 

[doug493]

@painkiller I pay $15 a month, so a little less than $200 a year, through State Farm, but I have four other policies as well. Do your other policies get any kind of discount?