Why Umbrella Insurance Costs Keep Rising
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What is the main topic discussed in this episode?
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Here's your money briefing for Monday, August 5th. I'm J.R.
What is umbrella insurance and when does it kick in?
Whalen for The Wall Street Journal. Umbrella insurance is designed to kick in when the limits on your other policies have been exhausted. But with inflation pushing the price of nearly everything higher, that's happening more often.
Many of us are paying higher auto insurance premiums. We're paying higher home insurance premiums. We're paying higher grocery bills. So this is just another cost that has gone up and it's frustrating a lot of consumers.
Wall Street Journal personal finance reporter Veronica Dagger will join us and run through the basics and the rising costs of umbrella insurance. After the break.
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Which types of claims are increasingly covered by umbrella policies (like online defamation)?
Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
Consumers often sign up for umbrella insurance to give themselves an extra layer of coverage, but it can be costly, and it's getting even more so. Wall Street Journal reporter Veronica Dagger joins me. Veronica, first of all, help us with the basics.
How are rising auto claims driving umbrella insurance usage?
What is umbrella insurance, and how does it relate to other forms of insurance someone might have?
Umbrella is a type of insurance that's meant to cover extreme situations for which things like car insurance and home policies aren't enough. So it's one of those things that usually kicks in when your limits on your other policies are exhausted. For example, if someone slips on your driveway and is seriously injured, that's probably not going to be covered by your homeowners. So it not only covers what It's in excess of your limits on your other policies, but it can also cover things that kind of fall through the cracks, like quirky things, like claims of defamation after an online post. If you go write a nasty Yelp review, for example, about someone's business or what have you, they may come after you.
The umbrella policy will cover that?
It might, yeah. And it's really interesting because social media or online slander or libel, so to speak, is an increasing use of these policies. More people are turning to umbrella to help cover them in the situation.
What are some of the other more common uses of umbrella insurance?
How much do umbrella insurance premiums cost and how have they changed recently?
The most common one is auto accidents. And so these days, claims for auto accidents have really skyrocketed, and that's for various reasons. And so we're in a situation where so much more often, your claims on your auto policy is exceeding what your limits are. And so as a result, if you have an umbrella, it's going to pick up where that auto insurance left off.
How do the premiums for umbrella insurance compare to other policies?
they are jumping like other policies. And so, for example, umbrella policies in the U.S. rose about 7% to $328 in 2022 from 2019. And you're like, oh, $328. That $328 typically would give you a million-dollar umbrella policy. People are like, oh, that doesn't sound so bad. But you need to think about This is a higher bill in addition to all the other higher bills everyone's paying. We're already paying higher auto insurance premiums.
Why are umbrella insurance prices increasing (inflation, medical bills, settlements)?
We're paying higher home insurance premiums.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:36
2
What is umbrella insurance and when does it kick in?
0:36–1:26
3
Which types of claims are increasingly covered by umbrella policies (like online defamation)?
1:26–2:13
4
How are rising auto claims driving umbrella insurance usage?
2:13–3:22
5
How much do umbrella insurance premiums cost and how have they changed recently?
3:22–4:32
6
Why are umbrella insurance prices increasing (inflation, medical bills, settlements)?
4:32–6:36
7
What practical steps can consumers take to lower their umbrella insurance costs?
6:36–8:33
8
How should you decide how much umbrella coverage you need based on net worth and household risks?
8:33–9:07
Speakers
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