Declared value insurance question...

[KFC911]

I'm in the process of reevaluating all of my insurance needs (houses, cars, health, etc.) and have a question for the brain trust. Is it legal to insure a car with two different companies, and if so, is it a good idea? For example, on a car, can I insure it with Hagerty (declared value) for half and another company the other half? Not attempting any type of a scam, etc. it just seems that it "might" be more cost effective to go this route. Thanks!

[schamp]

In Georgia its law to just have one company on one property. If two, upon discovery one has to refund. If claim was made against both, only one would pay. I expect its pretty much that way most states.

[KFC911]

Thanks! For clarification, I'm just asking about my 911...wouldn't even consider doing that for the houses.

[drcoastline]

Insurance "law" varies from state to state but in general it is legal. It is very common in life insurance. Not so much on the property/casualty side. The question on the P/C side is will the insurance companies knowingly do it? It's possible you could get one company to write say liability and a second to cover comp/coll on a car. I think you will find it very difficult to find two companies willing to split the same line such as each covering $500,000.00 in liability. If by chance it does happen they will be responsible for their respective percentages of the loss.

[KFC911]

I hadn't even thought about the "liability" aspect...I was just wondering about a "declared replacement" value. That's why I asked the "brain trust" ....thanks!

[drcoastline]

Originally Posted by KC911

I hadn't even thought about the "liability" aspect...I was just wondering about a "declared replacement" value. That's why I asked the "brain trust" ....thanks!

That was just an example. Same thing applies for the property portion. I think you will find it difficult to get companies to agree on splitting your value. say $24K declared value each picking up $12K. From a legal aspect it is to messy and therefore could prove costly to the companies. But if you did get them to agree in "general" the "law" would read that in the event of a loss each company would respond paying there respective percentage of the loss.

Why would you want to do that any way? I can see going with one carrier as they have a cheap Liability premium and another because there comp/coll is cheaper but why split the same coverage between carriers? What is the purpose?

Edit: I should also add it becomes messy for you also. If you have a loss now you have to meet two adjuster and they need to agree the damage and cost to repair is the same. One guy says we will pay to have a panel repaired the other says will replace it with a new after market panel and you say I want?????

[KFC911]

Thanks! You've brought up a lot of excellent points that I hadn't considered, and that was just my "first" bad idea of the day . On another thread regarding my 911, someone posted that Hagerty would have almost doubled their premium if they increase their declared value from 22 to 27K. In my case, I'd be wanting to take my declared value from 25K (too low) to probably 35 or so. I hear what you're saying....not worth the messiness of it all if worst came to worse even if it is technically legal. I've just been going through all of my ins. needs...shopping around, etc. and have already saved a bundle on my houses and will probably do the same on other stuff too. I do appreciate it!!!

[drcoastline]

Maybe look into an "excess policy" It's a shot but it's probably not going to be cost effective. If you want $27K and Haggerty, American Modern, etc. says $24K. Ask your agent to see if he has an outlet for the difference Maybe through Lloyd's? I think you will find the collector rates to be the cheapest but maybe you will get lucky.

Just an FYI when shopping don't just compare your rates. Make sure you are comparing company stability. Make sure the agent is providing you with the carriers financial rating. It's great to save a $100.00 per year in premium but that is worthless if the company is on the brink and you can't collect when you need them.

Good luck.

[Rusty914s]

You can pay monthly fees on as many companies as you will like.

One insurance company would need to be the primary and when it comes to payout, that company will pay the majority if not all payments.

You'd be wasting your money.

[KFC911]

Originally Posted by Rusty914s

...You'd be wasting your money.

Sorta the way I feel about ALL the insurance premiums I pay (and have paid over the years), but what can ya do? Just an idea I threw out here...I'm convinced now...it's not even under consideration anymore

ps: Sorta like "extended warranties" (which I've NEVER done)...if I totaled up all the ins. payments I've made over the years (never filed a claim), I could easily pay out-of-pocket for anything I own excepting a major medical event. I'm not a fan of ins. companies....the premiums on my houses have recently doubled (to recoup Ins. co losses for a 2010 storm on the coast of NC. )

[drcoastline]

Originally Posted by Rusty914s

You can pay monthly fees on as many companies as you will like.

One insurance company would need to be the primary and when it comes to payout, that company will pay the majority if not all payments.

You'd be wasting your money.

Rusty,

That is not correct. It is true you can pay as many premiums as you like but. If you have two valid insurance policies running concurrently. That does not mean one will pay and the other is off the hook or that you would get paid twice. Double indemnity.

For what ever reason lets say there are two policies in effect.

One with Haggerty @ $500 annual premium $24K value, issued 1/1.
Another with American Modern @ $500.00 premium $24K value, issued 6/1.

Both premiums are paid in full.

The car gets totaled 9/1. At the time of the loss the insured realizes he has two policies in effect and submits a claim to both carriers.

1. The insured will not receive $48K. That is double indemnity and is fraud by the insured if he accepts both.

2. Policy #1. Issued on 1/1 may be more responsible for the loss in essence 75% as the policy was in force for 75% of its term. Policy #2 may only be liable for 25% of the loss.

3. It could be deemed both policies respond and pay 50% of the loss each.

As you can see Policy #1 is going to push for scenario #3 and Policy #2 is going to push for scenario #2.

Neither carrier would return any premium to the insured. So the insured ended up in the end paying $1,000.00 in premium vs. $500.00.

Personally, I have never seen two policies in standard auto as the car own is almost always responsible to obtain coverage and make payment on their own. But I have seen it occur in Homeowners where the premium may be paid by a mortgage company. The company pays late. The insured gets a cancellation notice (not realizing the mortgage company is responsible to pay) and goes out buys their own policy. Now you have two policies in effect two agents, two carriers, non concurrent effective dates.

[drcoastline]

Originally Posted by KC911

Sorta the way I feel about ALL the insurance premiums I pay (and have paid over the years), but what can ya do? Just an idea I threw out here...I'm convinced now...it's not even under consideration anymore

ps: Sorta like "extended warranties" (which I've NEVER done)...if I totaled up all the ins. payments I've made over the years (never filed a claim), I could easily pay out-of-pocket for anything I own excepting a major medical event. I'm not a fan of ins. companies....the premiums on my houses have recently doubled (to recoup Ins. co losses for a 2010 storm on the coast of NC. )

I would tend to agree with you KC if you were talking about property losses. It's easy to calculate your loss. Your house has a $100K R/C you know if it burns down it's going to cost you $100k to replace it. That's a calculable risk. You could do the same on your car, boat, airplane, etc.

I am in the business and I am not a fan of insurance companies. But, more than insurance companies I am not a fan of LAWYERS and the LEGAL SYSTEM. That is an incalculable loss. You can never gave enough liability coverage. I don't know your net worth but I can easily come up with 1000 scenarios to bankrupt you and quick regarding liability.

What you may not realize is your liability coverage not only covers you for the award. But, more often than not defense costs including discovery, witnesses, etc. are unlimited and outside the limit of liability. A mediocre defense lawyer will cost you $300.00 per hour plus costs. How many hours can you afford to pay that person until you are out of money? Oh, and lets say you are found liable for Bodily Injure and/or Property damage. Can you afford to pay out of pocket the award?

If for no other reason look at the premium as paying for a bank account of $XXX plus retaining the best lawyers money can buy and all costs associated with the suit. BTW- your liability is not subject to your deductible so it kicks in at dollar 1.

[Rusty914s]

You're absolutely correct, you'll have both insurance companies trying to avoid paying out.

My point, although murky, was that more policies do not equal a higher payout...except, of course...life.

Originally Posted by drcoastline

Rusty,

That is not correct. It is true you can pay as many premiums as you like but. If you have two valid insurance policies running concurrently. That does not mean one will pay and the other is off the hook or that you would get paid twice. Double indemnity.

For what ever reason lets say there are two policies in effect.

One with Haggerty @ $500 annual premium $24K value, issued 1/1.
Another with American Modern @ $500.00 premium $24K value, issued 6/1.

Both premiums are paid in full.

The car gets totaled 9/1. At the time of the loss the insured realizes he has two policies in effect and submits a claim to both carriers.

1. The insured will not receive $48K. That is double indemnity and is fraud by the insured if he accepts both.

2. Policy #1. Issued on 1/1 may be more responsible for the loss in essence 75% as the policy was in force for 75% of its term. Policy #2 may only be liable for 25% of the loss.

3. It could be deemed both policies respond and pay 50% of the loss each.

As you can see Policy #1 is going to push for scenario #3 and Policy #2 is going to push for scenario #2.

Neither carrier would return any premium to the insured. So the insured ended up in the end paying $1,000.00 in premium vs. $500.00.

Personally, I have never seen two policies in standard auto as the car own is almost always responsible to obtain coverage and make payment on their own. But I have seen it occur in Homeowners where the premium may be paid by a mortgage company. The company pays late. The insured gets a cancellation notice (not realizing the mortgage company is responsible to pay) and goes out buys their own policy. Now you have two policies in effect two agents, two carriers, non concurrent effective dates.

[KFC911]

Originally Posted by drcoastline

... You can never gave enough liability coverage. I don't know your net worth but I can easily come up with 1000 scenarios to bankrupt you and quick regarding liability.
....

+1 on everything you've posted here. If you knew my net worth, you could probably come up with a few thousand more reasons too

ps: Topic for another thread, but I'm also wondering whether my 1M umbrella policy is worth keeping. When I had all coverages under one company, maybe, but now, I dunno

[fintstone]

Interesting thread. Personally, I only carry liability and comprehensive on my cars. Betting that I will not need collision (that any serious accident will be caused by someone else). Of course the most valuable car I gave ever owned was only worth about $36K. So far, my strategy has worked and saved me a lot of money.

This is a good topic since the value of older air-cooled models has continued to increase at such a fast rate the last few years. I may have to reconsider an "agreed-to value" type insurance.

[KFC911]

Fint, I feel the same way. Loss of a single vehicle (or house) wouldn't be a big deal....it's the liability reasons as the good Dr has noted. The recent threads about 911s has been what sent me down this path. If I were to total my 911 (my fault), it wouldn't be that big of a deal financially, but I figure an "agreed upon value" policy might just make it easier to swallow

ps: My best friend has three houses in Fl (and one in VA)...USAA will now only insure his VA house and ONE house in FL, so he had to drop two that now go uninsured . Did I mention that I do NOT like ins. companies...even the best ones suck.

[drcoastline]

Originally Posted by KC911

+1 on everything you've posted here. If you knew my net worth, you could probably come up with a few thousand more reasons too

ps: Topic for another thread, but I'm also wondering whether my 1M umbrella policy is worth keeping. When I had all coverages under one company, maybe, but now, I dunno

Absolutely keep it. Look into increasing it. Awards are getting larger not smaller.

An umbrella is just that an umbrella over everything. House, car, boat, RV, YOU. It is extra liability. Anything YOU are personally liable for. Underlying coverage need not be with one company. The underlying policies will respond first. The umbrella will kick in over and above the underlying policy limits.

Two key points about umbrellas.

1. They will require a minimum underlying limit.
2. They usually require A or better Best ratings of the underlying carriers.

Make sure you are incompliance with the underlying requirements or your umbrella won't respond.

I am sure you will find the cost to increase minimal.

[Rusty914s]

It all depends on what you're attempting to cover and what its worth is...

For instance, if you have a large art collection...then, there are certain carriers that would specialize in that field.

If your house is $1M+, then you would go to a certain carrier and although that same carrier would insure your $250K house, it would be a mistake because premiums.

I have no idea what money means to people...I would look for an insurance broker that's well respected in your area, unfortunately most are brain farts.

Edit: DrCoastline is giving your some very solid advice

[drcoastline]

Originally Posted by KC911

Fint, I feel the same way. Loss of a single vehicle (or house) wouldn't be a big deal....it's the liability reasons as the good Dr has noted. The recent threads about 911s has been what sent me down this path. If I were to total my 911 (my fault), it wouldn't be that big of a deal financially, but I figure an "agreed upon value" policy might just make it easier to swallow

So if you are willing to take that risk, why not just take the agreed value policy? If you feel the car is worth $30K but the carrier will only go to $25K you are self insuring the balance. Which is what you say above. Even if the car is considered totaled in reality it wouldn't be a total loss unless it burned to the ground or fell off a cliff. There will be parts that are good with value. You could buy the car back and reuse or sell the parts to recoup value. If the car had tub damage that required pulling that could cause it to be totaled but everything else would perfectly usable engine, trans, wheels, seats, dash, etc?

[KFC911]

Originally Posted by drcoastline

So if you are willing to take that risk, why not just take the agreed value policy? If you feel the car is worth $30K but the carrier will only go to $25K you are self insuring the balance.....

I agree with everything you and everyone else has posted on this thread. You are correct...I've currently got the 911's agreed value at 25K (not enough to cover a total loss, but "good enough"). It's just a balancing act of cost/benefit analysis and I'm in the process of reevaluating all of my ins. needs etc. Hey, this is where I come for feedback...PPOT rocks!