Umbrella Insurance in New Jersey: Learn from the Experts

Your homeowners or auto insurance provides critical legal protection, but in certain cases, it might not be enough. A particularly costly lawsuit filed against you could easily leave you in need of extra coverage. Fortunately personal umbrella insurance in New Jersey is designed to provide this important protection.

Even better, a New Jersey independent insurance agent can help you get set up with all the umbrella coverage you need. They’ll help you anticipate your legal risks ahead of time and get you equipped with the right protection to leave you feeling secure. But first, here’s a closer look at this important coverage.

What Is Personal Umbrella Insurance in New Jersey?

Personal umbrella insurance in New Jersey operates the same way it does everywhere else. Umbrella coverage acts as an additional layer of liability protection after the limit on your New Jersey homeowners insurance or New Jersey auto insurance policy gets exhausted. Often homeowners insurance includes $100,000 minimum in personal liability protection, but umbrella policies start with coverage limits of $1 million. You can even stack more umbrella insurance on top of that, if you wish.

How Does Personal Umbrella Insurance Work in New Jersey?

Umbrella coverage kicks in once the liability limit on your underlying policy is met. So, if you get hit with a costly homeowners insurance case, once you blow through the liability coverage provided by that policy, your umbrella insurance will be activated to make up the difference. If you’ve added a $1 million umbrella policy onto your $100,000 homeowners policy’s liability coverage, you’ll now have $1.1 million total in liability protection.

What Does Personal Umbrella Insurance Cover in New Jersey?

A personal umbrella policy in New Jersey is designed to extend liability protection included in other insurances. Personal umbrella policies are most commonly paired with homeowners insurance, auto insurance, or watercraft insurance.

Personal umbrella insurance in New Jersey covers the following:

• Extremely costly lawsuits: Personal umbrella insurance, also called “excess liability” coverage, provides a buffer against extra legal fees that go beyond the limit provided by your homeowners, auto, or watercraft insurance policy. Just one lawsuit could easily wipe out your built-in liability coverage, so having umbrella insurance can be critical. 

• Global coverage territory: Homeowners, auto and other insurance policies come with coverage territory limits. Basically, your coverage is restricted to certain areas. Many standard policies cover mishaps in the US, Canada, or Puerto Rico. Outside of these locations, you won’t be covered. But an umbrella policy extends this important coverage worldwide.

Just as a regular umbrella protects you against harsh weather, umbrella insurance protects you against harsh legal consequences. A New Jersey independent insurance agent can help you decide if personal umbrella coverage is a good choice for you.

What Doesn't Personal Umbrella Insurance Cover in New Jersey?

According to insurance expert Paul Martin, personal umbrella policies in New Jersey, like the rest of the country, aren’t standard. This means your policy could look quite a bit different from your friend’s. That being said, there are a couple of common exclusions in personal umbrella policies, like:

• Certain out-of-pocket expenses: Personal umbrella policies come with a “self-insured retention,” which is the amount the policyholder must pay if a claim is not covered by their underlying policy, like their homeowners or auto insurance. If a claim was covered by your umbrella insurance but not your auto insurance, you’d have to pay this amount, often $1,000, before your umbrella coverage would kick in to cover the rest.
• Non-liability related disasters: There are many costly disasters that could easily exhaust other coverage limits under your homeowners, auto, or watercraft policies. Umbrella insurance, however, is only designed to cover excess legal fees. So umbrella coverage won’t protect you against property damage claims that exceed your homeowners insurance’s limit.

If you’re concerned about not having enough coverage in other areas under your homeowners, auto, or watercraft insurance, your New Jersey independent insurance agent can help you extend your protection where desired.

How Much Does Personal Umbrella Insurance Cost in New Jersey?

Another great thing about umbrella insurance is that it tends to be very affordable, especially given the amount of additional coverage it provides. A $1 million umbrella policy can come with a premium that’s only $150-$200 annually. If you add more coverage, of course your premium will be higher. But consider only paying a couple hundred dollars each year for umbrella coverage vs. up into the millions for an unexpected, disastrous lawsuit.

Why Would I Need Umbrella Insurance in New Jersey?

You’d need an umbrella policy to protect yourself against unforeseen, expensive legal troubles. A couple of common examples of scenarios in which umbrella insurance can be critical include:

A New Jersey independent insurance agent can provide even more examples of when having a personal umbrella policy would make sense for you.

Here’s How a New Jersey Independent Insurance Agent Can Help

When it comes to protecting homeowners and drivers against costly legal expenses, no one’s better equipped to help than an independent insurance agent. New Jersey independent insurance agents search through multiple carriers to find providers who specialize in umbrella insurance, deliver quotes from a number of different sources, and help you walk through them all to find the best blend of coverage and cost.