Many of my clients are in the process of reviewing their Home and Auto insurance. Some are also shopping for excess liability (umbrella) insurance coverage. Many companies offer discounts for having both home and auto coverage with them. Some will write umbrella policies only if you have home and auto with them. The amount of underlying liability insurance they require before writing an umbrella policy also varies. VERY CONFUSING! To help clients with sorting this out I developed the following script to help them get comparable price quotes when shopping for insurance:
Insurance Purchase Script
Here is a process that you can use to get comparable insurance quotes for your homeowners, umbrella
and auto insurance coverage. If
you can find a recent article rating auto insurance companies from Consumer Reports online please
read it to find companies that are highly rated.
1. Determine what level of umbrella liability coverage you wish to have (e.g. $2MM)
2. Determine what deductible you want for your homeowners insurance. Remember it’s
generally not a good idea to make small claims on your homeowner’s policy so you may wish
to have a higher deductible. Also decide if you want any riders on your policy (jewelry, furs,
firearms, art etc.)
3. Determine what deductible you want for collision and comprehensive on your auto policies, a
higher deductible will save a substantial amount on your collision and comprehensive
coverage. (decide if you want rental car coverage or any other extras)
4. Contact the insurance company or agent and ask the following questions:
a. I’m interested in getting a quote for an excess liability policy, and auto policy, and a
homeowners policy
b. I would like to get a $xMM excess liability policy. Assume that I will have all of my
coverage with your company. Could you provide me a quote for that?
c. I would like to get a quote for my homeowners (with replacement cost coverage) and
auto policies for the lowest amount of coverage that I would need to obtain the excess
liability policy that you quoted me. With a $x deductible on my homeowners policy
and a $y deductible on my auto policy. Can you provide me those quotes? ( Make
sure that the auto policy includes coverage for uninsured or underinsured motorists)
d. So I have $A for the excess liability policy, $B for the homeowners , and $C for the
auto policy. Is this correct?
e. What is the maximum amount the auto policy will pay if I am injured by uninsured or
underinsured motorist? Will it pay to the limit in my auto policy or to the limit of my
excess liability policy?
f. For your replacement cost coverage on the homeowners policy what is the maximum
the policy will pay in case my home is a total loss? (They will express this as a
percentage of the insured amount. If you house were insured for $100,000 and they
provided a maximum of 120% then the maximum would be $120,000)