Personal Liability Policy, shocked at how affordable.

So I've never carried this before, but as I'm getting older, I see the value in it. Especially because I carry the state minimum coverage on our vehicles. In OK, that's 25/50/25. And with the value of newer vehicles and how easy it is for one to get totaled, I decided to look into this.

I recently switched back to State Farm. They have my house and both cars. So I called for a quote on a $1 million liability policy, if you're not in the know, this covers a ton of stuff. Let's say I hit a super expensive car and total it. The car insurance will take care of the first $25k, but the liability policy covers the excess up to $1 million. It also covers if someone gets injured at your house, if something happens away from your house, etc. 

Only $20/month. 

Yeah, I need to do that.  It keeps slipping off my radar.

Thanks for the reminder.

I used to work for a gecko as a claim investigator (basically determine coverage and who is at fault). Surprisingly in the 4yrs I was there, I only heard of a handful of people who had umbrella coverage (that extra $1m policy).

Your thinking is good though, it's very easy these days for an accident to meet or exceed your policy maximum coverage. A new Camry starts at $26k. And labor costs in repair will quickly add up even in a small accident, so you could be hitting that 70% repair cost threshold quick.

I personally carry 100/300 but will need to read policy language to check details of how the umbrella policy would come into play....because running 25/50 and then $20/mo extra is wayyyyy cheaper than my premium 

My insurer (USAA) requires that you max the limits on all other policies before you can add the umbrella policy.

secretariata (Forum Supporter) said:

My insurer (USAA) requires that you max the limits on all other policies before you can add the umbrella policy.

Same here. In GA, Allstate. 

Same here, WV, State Farm.

We do have the coverage maxed out on pretty much all of the vehicles - the cost difference between state minimum and maxed out for liability actually isn't that much. Oh, and an umbrella on top.

The part that hurts on most policies is uninsured/underinsured motorist. On the policy I just bought for one of the bikes, that's almost 50% of the premium. That's on a policy with full coverage...

I can't imagine having a $25k auto policy and not having an umbrella policy. If you hit the average car on the road nowadays, that $25k is gone instantly. I really can't see having a $25k policy even with an umbrella policy at this point based on the cost of normal repairs, is it that big of a premium difference between $25k and $100k?

OHSCrifle said:

secretariata (Forum Supporter) said:

My insurer (USAA) requires that you max the limits on all other policies before you can add the umbrella policy.

Same here. In GA, Allstate. 

Mine too. We had to drop the umbrella coverage this year when our yearly bill hit $8000. I know that we are under insured, it's just what I can afford right now.

Steve_Jones said:

I can't imagine having a $25k auto policy and not having an umbrella policy. If you hit the average car on the road nowadays, that $25k is gone instantly. I really can't see having a $25k policy even with an umbrella policy at this point based on the cost of normal repairs, is it that big of a premium difference between $25k and $100k?

From talking to my agents office, the difference is cheaper to have the liability policy vs upping the auto policy. They ran the numbers for me.

So not sure what to say? Their job is to sell me policies, so when they give me an option that provides me more coverage for less money....

And before the snark starts, I'm a licensed claim rep in my state, so I'm not a Chad.

In reply to z31maniac :

There's no snark, I'm just amazed the State minimum is that low. I can't imagine driving around with only $25k in coverage unless I had 0 assets. Hit someone in a 2020 RAV4 and you're out of coverage. I'd rather pay a little more vs risk my house, etc. All of my kids have umbrella policy's because they are a lot of coverage for cheap. Most people don't think about them, so they don't know they're affordable. 

Every state is different, so maybe things are different in OK.

It is interesting that the excess liablity will allow such a low base.  I mean, their premise is "we'll pay the over and above."  It's surprising that they would cover above state min, but a local expert should know this, and even if they don't, the liability provider will flag it if they don't like it and won't write the policy.

What I'm more concerned about is the concept of covering property damage.  In your example above, 25/50/25, the 25/50 is bodily injury individual/combined claim and the last /25 is property damage.  I would double check that the excess liability also covers the property damage part.