Allstate Umbrella insurance - surcharge for vehicles ?

[Lakewood90712]

Made some changes to my Allstate auto policy ( dropped medical payments, added second vehicle), and now I get a $20 umbrella policy increase ( more than that , $20 is for partial year ) "surcharge for cars". ? I have had an umbrella policy , along with auto and homeowners for over 25 years. Never a surcharge for cars , had 1 car and 2 trucks a couple of years ago , no surcharge , might I expect a surcharge for " House " too ?

Anyone experienced this ?, or am I special to the "Good Hands" people .

I know Allstate financial performance was terrible last quarter ,so they are beating the bushes to increase revenue , but this nit picky stuff is over the top.

[nerkdawg]

Most umbrella policy's have a minimum liability covearage requirement for the auto and homeowners policies. The umbrella coverage kicks in after the auto or homeowners coverage is used up. I suspect that your changes to the auto policy dropped you below the minimum coverage required for the umbrella policy - thus a surcharge would be required for the umbrella policy to cover the additional liability you dropped from the auto policy.

[greydog17]

Umbrella policies don't usually cover medical payments to you and your family, which is the coverage you dropped from your auto policy, so that was not likely the cause of your premium change.

But, most company's umbrella policies rates reflect the exposure of the underlying auto and home policy, and using the number of cars and homes owned as one of the rating elements is typical. Its no longer a flat rate as it may have been when you previously had multiple vehicles, so when you added a car you increased the umbrella exposure and thus the added rate charge.

[soupcxan]

Allstate engages in "price optimization" which basically means they increase your premiums every year (even with no claims) until you finally get fed up and switch insurers.

I would drop them and move to an insurer that treats its customers with at least a little respect.

[RE2Boys]

Hey, maybe Allstate is providing more visibility in their rates. My company just changes the total charge without any visibility on how they arrived at the rate. In the past, when I added a third car (with two drivers), rates went up. When car sold, rates went down. When added a teenage driver, rates went up. But no break down of the rate structure.

[Lakewood90712]

The only anomaly I can see , is the additional vehicle shows " No assigner operator". Might be the clue, never had that designation before. I'm calling this am to clarify the changes.

I would like to change agents, but that requires new policies, and Allstate is no longer writing new homeowners policies in CA. The house is over 70 yo, and that could be a problem with a new carrier.

The Agent is a very large producer, he bought the " Book" of existing customers when my old agent retired about 5 years ago. The place has over a dozen staff,and some turnover. A lot of issues requiring me to call and spend time getting things fixed in the last couple of years.

PS , on every phone contact, they are always trying to push " Rent a car reimbursement coverage " if a car is disabled in an accident. Must be a very profitable line of insurance. Reminds me of " would you like fries with that "

After the thrashing Allstate took on wall street lately, the actions to suck up every nickel from policyholder is quite visible, to me at least.

[JoeWras]

Pleased to get a mutual dividend back from Amica for my umbrella. The cost at Amica for auto/home/umbrella was slightly more than S.F. But then I got the refund and it made it cheaper.

Also was amazed to see my homeowners drop even though they inflation-increased coverage.

S.F. is also a mutual company. We used to get dividends but didn't see anything but major increases the last 8 years. Apparently the dividends are now going to the CEO and advertisers.

[braumeister]

The only surcharge I've heard of on umbrella is when you don't have all homes and cars insured by the same company. I would be very curious to know what they tell you "surcharge for cars" is supposed to mean.

Quote:

A personal umbrella insurance policy is by far the best buy in the insurance business. A $1 million policy will cost you between $150 and $200 a year. How Much Umbrella Insurance Coverage For Me? | Bankrate.com

[Lakewood90712]

Got a return call.

Apparently, the " re-designed " policy and automated systems are finding things. The rep stated that a charge for more than one vehicle has been in their underwriting for a long time, but had to be manually input, and the agents accidentally-on-purpose were not doing it, because it made customers mad.

Must of been some massive changes at HQ after recent poor financial results.

Already paying about $300 for the umbrella , now $60 (whole year) for each car over one. I asked how additional cars sitting in the driveway or garage increase liability losses .....Crickets

[meierlde]

Quote:

Originally Posted by Lakewood90712 Got a return call. Apparently, the " re-designed " policy and automated systems are finding things. The rep stated that a charge for more than one vehicle has been in their underwriting for a long time, but had to be manually input, and the agents accidentally-on-purpose were not doing it, because it made customers mad. Must of been some massive changes at HQ after recent poor financial results. Already paying about $300 for the umbrella , now $60 (whole year) for each car over one. I asked how additional cars sitting in the driveway or garage increase liability losses .....Crickets

If there is more than one driver in the house (for the cars) then yes both cars could be on the road at once.

[bingybear]

Can't explain your issue, but I changed my collision deductible and looked at what this did to my liability (on a car)... as I increased the deductible or eliminated collision, my liability costs went up. this was not allstate. They may have coupled insurance costs either to make more money that they are't getting when you reduce insurance or as the likely claim that they that reducing one thing affects the likelihood of changing their risk. I believe the former

[swakyaby]

I've been an Allstate customer for nearly 18 years. The rates were stable until the last 5 years when they began raising my homeowner's rates $100 a year. I believe that's what Soup calls "price optimization." It definitely does not pay to be a loyal customer with Allstate anymore. When we challenged their increase, they returned some of the increased fees. When they increased their fee $100 again this year (despite never having a claim, ever) we got fed up and began shopping around. We have our homeowner's insurance and one car and umbrella policy with AAA. The umbrella policy went from $300 with Allstate to $185 with AAA. However we had to drop excess liability coverage on our motorcycle as it would increase our umbrella policy premium by $100.

It pays to shop around.

[Lakewood90712]

Went back to work part time this week, and called Allstate to change the auto and homeowners policy to reflect.

Homeowners increased slightly , but to my surprise, the auto policy went down The agent said so many people were falsely claiming " pleasure / errands " use so approx 5 years ago Allstate did a 180 and changed the rating , so
" commute use " got a lower rate

IIRC , the insurance industry always considered commuting to have more collisions per mile.

[athena53]

Quote:

Originally Posted by bingybear Can't explain your issue, but I changed my collision deductible and looked at what this did to my liability (on a car)... as I increased the deductible or eliminated collision, my liability costs went up. this was not allstate. They may have coupled insurance costs either to make more money that they are't getting when you reduce insurance or as the likely claim that they that reducing one thing affects the likelihood of changing their risk. I believe the former

This happened to me and I asked about it on an actuarial discussion board where I was active at the time. I'd dropped collision and comprehensive coverage on my car because it was pretty old and figured I'd save $X (the cost of the coverages I was dropping). The savings was significantly less than $X. The agent explained that people who don't buy physical damage coverage are seen as riskier drivers and are put into a less-desirable pricing "tier" with higher rates. It made no sense to me; I'd think people who had to foot the bill for their own repairs would be a lot more careful. The actuaries told me that insurers prefer to write physical damage because it's a stabilizing influence. Liability claims can be $1,000 or $100,000 or more. Physical damage claims fall into a narrower range and thus results are more stable.

A comment on "price optimization": this is not an arbitrary decision to throw increases at segments of the market who are less price-sensitive. All rating plans must be approved by the state Department of Insurance in the US and must be backed up by statistics. Companies can point to data showing that people who use their car to commute have higher losses on average because they're out on the road twice a day during peak hours, and sometimes during dusk and dawn when visibility is poor, and sometimes in snow and ice because they have no choice. That's a reason to charge higher premiums. There has to be a reason or that state won't approve the rates.

[JoeWras]

Quote:

Originally Posted by athena53 That's a reason to charge higher premiums. There has to be a reason or that state won't approve the rates.

Or you can do like many insurers are in NC -- force the insured to sign a document consenting to any rate the company wants to give. This is with homeowners. It has gotten very ugly and was one reason I changed from S.F.

[athena53]

Quote:

Originally Posted by JoeWras Or you can do like many insurers are in NC -- force the insured to sign a document consenting to any rate the company wants to give. This is with homeowners. It has gotten very ugly and was one reason I changed from S.F.

Wow. I'd heard of "consent to rate" but never knew of an actual application. My parents live in Myrtle Beach about a mile from the coast and solved their insurance problems by dropping windstorm coverage. They said the property is worth more than the house, anyway.