Consumers get a good rate on umbrella insurance by buying the right amount of coverage and shopping for rates, reports the New York Times. Strategies for getting good rates include comparing prices, consolidating various types of insurance with one company and raising deductibles, states MarketWatch.com.
Umbrella insurance provides increased coverage for consumers when lawsuits and medical bills surpass liability limits on car, boat or home insurance, according to Bankrate.com. For wealthy consumers, the first $1 million in umbrella insurance is the most expensive, and the price goes down with each additional million, reports the New York Times. With companies that specialize in low- and middle-income clients, however, the first $1 million in insurance is often the cheapest, and the rates go up for further coverage. Insurers base cost estimates on premiums paid compared to amount of risk, so because fewer low-income clients buy umbrella insurance, the companies can't afford the risk of high payouts.
When purchasing umbrella insurance, consumers should shop around to several companies, as prices vary significantly, reports MarketWatch.com. Consumers often save money by buying home, car and umbrella insurance from the same company, and often companies require consolidation before selling umbrella insurance. To better afford the cost of adding an umbrella insurance policy, consumers can raise the deductibles on car and home insurance to lower the cost of the overall package.