Additional cost on umbrella policy for a boat? How much is reasonable?

[IslandRadio]

When in doubt, ask the voices of experience

So, here's the problem. We have an umbrella policy that we've had for many years - attached to the main house homeowner's insurance.

We have a place on Rattlesnake Island, so obviously, have a boat to get there.

For whatever reason, even though I listed the boat on the umbrella renewal questionnaire in the past, they didn't seem to have it. Well, this year I got a call from the agent asking the horsepower of the boat.

The boat is a 1988 Century that has a big engine, but I've NEVER driven it above about 37 mph. I don't actually know if it will do 45. The RPMs are up there at 35.

Anyway, because the horsepower of the boat is listed at 300, the additional cost on the umbrella is something like $400 a year, which seems quite excessive. That's like insuring a car with no collision or comp. I would have expected maybe $50. Heck, it only costs $20 to extend our main policy's coverage to the cottage on Rattlesnake island.

Anyone have any experience with this sort of thing? How much do you pay?

Thanks and Regards,

Steve

[DesertDweller]

How much coverage are you talking about? $400 doesn't seem all that bad depending on the coverage.

My umbrella policy is an extension of all of my policies (auto, homeowners, boat, employer's liability). I would make sure that is the case with yours and also make sure the umbrella coverage kicks in where the others stop (i.e. no gaps).

My umbrella policy used to be dirt cheap but the cost is really going up over the last 5 years or so. For me, it's well worth the peace of mind it brings.

[Descant]

Only your agent knows for sure.

My umbrella (USAA, $!MM) is just under $400 per year. They don't show pricing for individual items, but all are listed on the declarations page Three boats (One boat at 300hp, one at over 300, one smaller outboard, but that info is not shown) Multiple locations listed, home, camp, condo boat slip. No inexperienced operators on cars or boats.

[AC2717]

An Umbrella policy is a rate based on the underlying exposures (homeowners liability amount, # of autos on the policy along with Driving records, and extra toys like boats, pwc, motorcycles) You can pick and choose what you want as underlying coverage meaning what will be covered under the umbrella after those limits are exhausted, but in the end the savings of $20-$100 is not worth losing out on the extra million in coverage on any one particular item.
With that said your homeowners liability, auto liability and toy liability is based on where you live, age of drivers, previous history, credit score.......
the umbrella rate is a direct reflection of these rates.

when it comes to the boats, Carriers have different rates for sizes of boats and then as well as horsepower. Just because you say you don't drive it above a certain limit doesn't mean you, or someone else wont ever do that, it is the fact that it has the capability to do so.

If the extra cost of the umbrella is another $400 on top of what you are already paying for the umbrella, then there are multiple questions:
did they put an endorsement on your homeowners to accommodate that size of a boat and horsepower (would be part of the increase because a boat of that size would not be covered automatically under a homeowners) 2 if there is no primary boat liability policy and it is on the umbrella, the umbrella actually drops down to be a dollar one coverage meaning it acts like a primary policy and not excess which is what it is supposed to be

I would bring these two questions above to your agent. In the case of #2 above it might be cheaper to get a stand alone boat policy and then just add it to the umbrella, or just keep way it is.

I would personally want the umbrella coverage more on the boat then anything else because the exposures and dangers are that much more

Disclaimer: I am an insurance agent, but not trying to solicit your business, just trying to give some insight to the process

[IslandRadio]

Right! I should have been clear.

The $400 is IN ADDITION to the cost of the umbrella policy without the boat, which is around $700

[MAXUM]

Originally Posted by AC2717

With that said your homeowners liability, auto liability and toy liability is based on where you live, age of drivers, previous history, credit score.......
the umbrella rate is a direct reflection of these rates.

Just out of curiosity... what difference does it make what your credit score is?

[AC2717]

Originally Posted by MAXUM

Just out of curiosity... what difference does it make what your credit score is?

Most carriers, for your personal insurance (home, auto), have been for the past couple years using your Insurance Credit score (along the same lines as credit score but with a couple factors added and some left out) in order to determine your rate. Which is part of the reason why they ask for social security numbers (one thing to note a insurability check, does not harm your credit)

There have been numerous studies conducting showing a direct relationship of bad credit scores and severity of claims and numbers of claims. Meaning that just because someone has a bad credit score they will have a claim

My view - although this has been proven, does not mean it is right or a correct view on an individual basis For example my wife and I were in some financial trouble more than a few years back but I did not have a claim but some carriers would not take us on as insureds - but it is like everything else law of averages.

[AC2717]

Originally Posted by IslandRadio

Right! I should have been clear.

The $400 is IN ADDITION to the cost of the umbrella policy without the boat, which is around $700

in order to get a clearer picture I would have to know all the underlying factors and how many $1mil layers you have to the umbrella. Feel free to PM me if you want, I can maybe direct you on what to ask your agent for your particular case

[DesertDweller]

Originally Posted by IslandRadio

Right! I should have been clear.

The $400 is IN ADDITION to the cost of the umbrella policy without the boat, which is around $700

Got it. Yes that's expensive. $700 should buy you plenty of coverage on an umbrella policy including the boat.

[IslandRadio]

I suspect Umbrella policies are less expensive in New Hampshire than here in Mass.

Fewer Sew-ers

[Descant]

I worked for an insurance co some years ago. The claims people said they tried to get claims registered in NH and in Hillsborough County in particular because juries were more realistic.
Q. How long have you lived in NH Mr Smith before you slipped and fell?
A. 12 years
Q. And in how many of those years was there snow and ice present from time to time?
Q. Every year.
"Move to dismiss, your Honor"
"Motion granted"

Live Free or Die.
Clean water, cheap booze, and now, cheap insurance.

[secondcurve]

P

Originally Posted by IslandRadio

When in doubt, ask the voices of experience

So, here's the problem. We have an umbrella policy that we've had for many years - attached to the main house homeowner's insurance.

We have a place on Rattlesnake Island, so obviously, have a boat to get there.

For whatever reason, even though I listed the boat on the umbrella renewal questionnaire in the past, they didn't seem to have it. Well, this year I got a call from the agent asking the horsepower of the boat.

The boat is a 1988 Century that has a big engine, but I've NEVER driven it above about 37 mph. I don't actually know if it will do 45. The RPMs are up there at 35.

Anyway, because the horsepower of the boat is listed at 300, the additional cost on the umbrella is something like $400 a year, which seems quite excessive. That's like insuring a car with no collision or comp. I would have expected maybe $50. Heck, it only costs $20 to extend our main policy's coverage to the cottage on Rattlesnake island.

Anyone have any experience with this sort of thing? How much do you pay?

Thanks and Regards,

Steve

Insurance cost can variy significantly from carrier to carrier. My guess is that you haven't shopped your policies in quite sometime. My suggestion is you find another agent and tell them you feel your insurance costs are way too high. Have them shop price and most importantly have them review your coverages to ensure they are appropriate. You will be amazed at how much money can be saved if you haven't gone through the process in a while. Good luck and please let us know how things turn out..

[Donzi Minx]

Naturally you want to be sure that your assets are covered. When my three oldest boys were of driving age, I entertained an Umbrella policy with a local agent. They simply would not quote because of the Donzi. Talk about discrimination with regard to credit score!

Chief Thundercloud, to whom I have been married for 35 years thought that this might be the perfect opportunity to sell the minx. I rolled the dice, have the homestead on the house and property, and I still have that damned Donzi! Things are still really sweeeeeeet!

[TiltonBB]

All of my individual policies for the vehicles, boat, jet skis, and real estate have a liability limit of $500,000. The $1 million umbrella takes over after that so in effect the coverage is $1.5 million total. The umbrella premium is $645 which seems fair to me. My boat has 375 horsepower.

I would list what property you have and email it to 5 agents and ask for proposals without letting them know what you are paying now.

On another note: Changing insurance companies is easier than changing accountants. When I have gone to a new accountant because I felt I was over paying they ask for 2 years of tax returns and depreciation schedules so they see what you have been paying previous accountants and charge you the same rate, or more. It took 3 changes but I have now found an excellent accountant that charges less than 1/3 of what I was paying for the previous 10 years.

It pays to shop around with most services. Sorry for the minor hijack!

[tis]

Would love to know you have for an accountant, we recently got a new one because ours retired and we were "switched" over to this one. I can't say I am thrilled with the new one.

[AC2717]

Originally Posted by Donzi Minx

Naturally you want to be sure that your assets are covered. When my three oldest boys were of driving age, I entertained an Umbrella policy with a local agent. They simply would not quote because of the Donzi. Talk about discrimination with regard to credit score!

Chief Thundercloud, to whom I have been married for 35 years thought that this might be the perfect opportunity to sell the minx. I rolled the dice, have the homestead on the house and property, and I still have that damned Donzi! Things are still really sweeeeeeet!

I hope they offered you an umbrella without the boat being an underlying coverage at least?

[Donzi Minx]

The Melrose Agent was not very flexible with regard to any policy while the boat was in my possession, so to answer your question no.
He determined that the speed that the boat was capable of represented too much of a liability for them to take on.

Tricky time in my life where my two oldest insisted on being the poster children for bad behavior, but that is nearly a ripple on my wake now.

Could we talk about student loans?!!!

[Winnisquamer]

Originally Posted by Donzi Minx

The Melrose Agent was not very flexible with regard to any policy while the boat was in my possession, so to answer your question no.
He determined that the speed that the boat was capable of represented too much of a liability for them to take on.

Tricky time in my life where my two oldest insisted on being the poster children for bad behavior, but that is nearly a ripple on my wake now.

Could we talk about student loans?!!!

Student loans? You mean your congratulations your now officially a lost adult and poor forever certificate?

[Donzi Minx]

How about credit rating in the dumpster!
"I know you co-signed for the loan Dad, but they will get their money when I get my money".

My own flesh and blood, never seen anything like it, (least not boomer gen.).

[Descant]

I was an insurance sales rep. for decades. No harm in telling somebody what you pay now, or who your carrier is. Saves a lot of time, e.g. "That's a great rate and you should stick with it." means
a. "I know that company and I can't compete with them." or
b. "I really would prefer not to have your risk in my book of business."
Either way, you save time and you didn't really want to go there after all.

Sometimes I'd get declarations pages with rating info redacted, and a statement saying "Please quote, don't call." Can't do it.

And after all, don't you want a company or agent you can talk to? That worth more in the long run than saving a few bucks.

And, look at the total package (not price). If they give you a good deal , but won't cover your OHRV or your Donzi, who will insure the lone item and treat you fairly?

I remember when it was hard to get an underwriter to cover a pontoon boat because it was called a "Party Barge". Things change, so shopping every few years is worth it for many people.

[AC2717]

Originally Posted by Descant

I was an insurance sales rep. for decades. No harm in telling somebody what you pay now, or who your carrier is. Saves a lot of time, e.g. "That's a great rate and you should stick with it." means
a. "I know that company and I can't compete with them." or
b. "I really would prefer not to have your risk in my book of business."
Either way, you save time and you didn't really want to go there after all.

Sometimes I'd get declarations pages with rating info redacted, and a statement saying "Please quote, don't call." Can't do it.

And after all, don't you want a company or agent you can talk to? That worth more in the long run than saving a few bucks.

And, look at the total package (not price). If they give you a good deal , but won't cover your OHRV or your Donzi, who will insure the lone item and treat you fairly?

I remember when it was hard to get an underwriter to cover a pontoon boat because it was called a "Party Barge". Things change, so shopping every few years is worth it for many people.

100% right and we try to explain this to new clients, about 50% understand it

[Descant]

BTW "Shopping" does not necessarily mean change agents. If you have Ford and you like it but want to see what's new, you start with your Ford dealer right?

[TiltonBB]

Originally Posted by Descant

BTW "Shopping" does not necessarily mean change agents. If you have Ford and you like it but want to see what's new, you start with your Ford dealer right?

If you expect the agent to be working in your best interest why would you "shop" with them? You would need other opinions and offers to find out if your agent is getting you the best deal. The agent that already has your business may not be as likely to work hard for you but a different agent hoping to earn your business might.

Many years ago I bought some rental houses and went into the local Allstate agent before each closing to get insurance. After about 10 years I shopped it around and another agent structured the primary policies and the umbrella differently and saved me about $1,200 per year. When I dropped the Allstate agent he called and said "I could have done that". When I asked why he didn't the conversation ended.

Your insurance agent works for commissions so it is more likely what they offer will be in their best interest than in your best interest.

[tis]

I was paying around 800 for the Baja and got it down to around 300. It took a bit but I insured three boats together with Progressive.

As for the umbrella, I have 5 boats insured under the umbella and they can't possibly be 400 each with everything else that is insured. One company would not cover us because of the Baja, another would not include the Baja.

[IslandRadio]

We finally got a good solution !

The agent was able to write a boat-only policy for $100. We added that, and everything is good to go !

The umbrella wanted some other "primary" insurance... and since the boat is pretty ancient (1988), I never bothered getting a primary boat policy.

Thanks VERY much for the intelligent responses and interesting discussion. Please continue both, of course

Regards, Steve