Expert: Bennie 719 - 3/16/2008

Question
QUESTION: We are trying to put a personnal Umbrella into place. I have a 1929 Model A insured with an antique car insurer who only changes me $60 a year.  I upped liability with them to what is required by umbrella law.  State Farm says sill not good enough, that under Texas law they can't issue umbrella unless we insure all our cars with them.  The problem is they want some $600 a year for the Model A.  This provision in the law just doesn't sound right.  If it's true, just tell me they are right.  If you don't think it's true, where are the right words I should quote in the Texas law?  I really apprciate your help!

ANSWER: Hi Doc,
I can't fully answer your question until I make some contacts in Texas, which I can't do until Monday.
At the moment, I tend to agree with you.  I seriously doubt that such a state law exists, however, many companies have their own rule that they must insure all owned automobiles in order to write an umbrella policy.
I'll get a full answer to you ASAP.
Bennie

---------- FOLLOW-UP ----------

QUESTION: P.S.  My wife (who passed this question to me) says I got it slightly wrong.  She says the company told her Texas law required them to charge a "premium" on the Umbrella if we didn't insure the car with them.  The "premium" is significant and doesn't sound right either!  Appreciate the help.

Answer
Hi Doc,
Based on the information that I have learned from contacts in Texas,
the state insurance law does not 'require' that a company add an additional 'premium' to the umbrella policy if they don't have all your vehicles insured, but it 'allows' the company to add such extra premium.
According to my sources, State Farm has instructed their Agents that the additional premium will apply in all cases when all your vehicles are not insured by them.
There are many companies that will write an umbrella policy even if they have none of your cars insured.  You can call any insurance BROKER who represents multiple companies for a quote.
You should get a quote from several brokers and compare to State Farm's quote and then make your decision.
I hope this information is of help.
Sincerely,
Bennie
San Francisco Bay Area