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Excess UIM/UM coverage in umbrella and auto insurance

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  • Excess UIM/UM coverage in umbrella and auto insurance


    I have an auto and renter's policy with GEICO. I recently purchased a 1M umbrella policy from RLI Corp via GEICO. I am interested in buying excess UIM/UM coverage as well. But the sales representative tells me that lost wages are not covered under excess UIM/UM.

    1) If lost wages are not covered under UIM/UM, then what's the use of having excess UIM/UM when one has good medical insurance?
    2) Is it only GEICO and/or RLI that does not offer lost wages coverage? Or all umbrella insurance companies don't offer as well? Can you recommend any that does offer?
    3) If lost wages are covered under UIM/UM, is it only current or future wages? Can one get benefits from both UIM/UM and disability insurance if one gets disabled after a car accident?
    4) I was told GEICO or StateFarm is not good and I should consider switching my auto/renters/umbrella to insurance companies like Chubb or Travellers. Do you recommend it?


  • #2
    The sales rep is selling the policy, where as a claim adjuster would be making the interpretations according to the policy. UM/UIM coverage through your insurance steps in when the at fault party is either Uninsured or Underinsured for the damages they are negligent for. In claims, we looked at special and general damages. Special damages are easily quantified because they are your medical bills, lost wages, etc. General damages are more the suffering associated with the injury and treatment and loss of activities.

    UM/UIM should cover lost wages. I'm not aware of how Geico could get around that. It's possible that you are in a PIP or No fault state where wages are handled first through that coverage and then secondarily through UM/UIM.

    Most full service carriers should cover lost wages, thats part of why higher earners specifically endorse their umbrella policies with UM/UIM coverage. Low state minimum liability limits of coverage don't go very far for demonstrable injuries and high earners.

    Actual lost wages are easier to consider assuming it's reasonable for the injuries. Future lost wages are more challenging to consider without the opinion of an expert outlining the necessity. Some policies carry offset language where you cannot double dip coverage, but it may allow you to be made whole. For example, your disability policy may only pay 60% of wages, but your UM/UIM could make up the difference.

    I wouldn't say Geico or State Farm are bad, they fit a certain customer profile. I'd encourage you to find an independent agent who will work to find you the best coverage targeted towards high net worth individuals. There are a number of companies in this space including Chubb, Pure, Cincinnati Insurance, Metlife, etc who all have special policies targeted towards HNW folks.