Originally Posted by KingB
State Farm quoted us for $300/year for 1M and $450/year for 2M which seems to be higher than of the premiums mentioned on this thread. On the quote, it says that DW and I are covered for liability.
Are the premiums you are paying now cover both you and your spouse?
I can't speak for others... but my situation is pretty simple (liability-wise). I'm single, no kids, one car. While I do own a wood-frame house with a pool... I can't imagine any other "red flags." Still, I'm no insurance expert.
While it's several years old, here's an interesting (if not frightening) article that might help.
They explain rate quotes like this...
Around the country, at companies dealing with rich clients, the first million in coverage is usually the most expensive, at perhaps $150 to $300 annually, said Jeanne M. Salvatore, a specialist in home insurance at the Insurance Information Institute. Each additional million in coverage, she said, could cost around $100 to $125 annually. The rates per million decline as coverage increases. But at $10 million in coverage, the rate jumps because few customers buy that much, meaning insurers can spread their risk over only a relatively small group of customers.
The situation is often the reverse for the many insurers who specialize in middle- and lower-income clients. Often their rates shoot up after the first million in umbrella coverage because they have only a small group of buyers of umbrella policies larger than $1 million. A smaller pool of customers creates more risk per dollar of premium for an insurer, so the insurer charges more for the coverage.
One homeowner said that for a $3 million umbrella policy from a middle-income insurer, the second and third million in coverage cost him 3.5 times the rate for the first million of coverage.