New Jersey is an active state where residents enjoy everything from ocean seaside resort areas to water parks and horse races. If you call the Garden State home, are you prepared for accidents and injuries with the proper insurance? Consider talking with an agent about New Jersey umbrella insurance, which can provide an extra layer of financial protection above and beyond the liability coverage in your other policies.
Lawsuits are extremely costly and an umbrella policy can protect you if you are ever sued. An independent insurance agent in our network can help you learn about the benefits of this coverage and provide several New Jersey umbrella insurance quotes for you to compare. Contact a local member agent today to learn how to better protect your financial assets.
A Statistical Look at Lawsuits in the U.S.
- Annual cost of lawsuits to the U.S. economy: $233 billion dollars
- Average annual number of Federal Court tort cases: 512,000
- Average award in a punitive damage lawsuit: $50,000
New Jersey Umbrella Insurance Explained
Insurance policies such as your auto, homeowners and motorcycle insurance include a monetary maximum amount for liability coverage. If you are sued because of an accident you cause, or your negligence, and you are ordered to pay a settlement or legal judgment to the injured party, this is what will occur:
- Your liability policies will cover your legal defense.
- They will also cover the settlement or judgment, up to the limits of your policy.
- Any payment above the maximum coverage amount is your responsibility.
For example, if you had an auto policy with a $500,000 maximum liability amount and were ordered to pay the injured party damages for $850,000, you would be financially responsible to pay the remaining $350,000 out of your own pocket. Umbrella insurance allows you to protect yourself by increasing the amount of liability protection for most if not all of your policies simultaneously, truly acting as an "umbrella" over your risks and your finances.
How Does Umbrella Insurance Work?
An umbrella insurance policy gives you added protection by increasing your liability coverage in two ways:
- Raises the liability dollar limit on existing policies: For example, consider the following scenario.
- Your auto policy has liability coverage in the amount of $250,000
- Your homeowners policy has liability coverage in the amount of $250,000
- You buy an umbrella policy worth $1,000,000
- In the event you are sued, the umbrella policy would cover a liability award that exceeds $250,000 under your auto or homeowner’s policy
- Covers exclusions in existing policies: Many policies don’t cover you if you have liability damage claims arising because of a false arrest, libel, slander, or defamation of character. Should you be found liable for damage because of these types of claims, your umbrella policy may cover you.
A local independent agent can help answer your questions about New Jersey umbrella insurance so you can make the most informed decision about this coverage.
Who Needs More Liability Coverage?
Extra liability coverage can be a useful purchase for just about everyone, and particularly for people who meet the following criteria:
- You have a larger liability risk exposure because you participate in activities or have possessions that put you at a higher risk for expensive lawsuits.
- You cannot afford to risk your existing assets such as your income, retirement savings, college funds, salary and other assets which might have to be used to pay a liability award above the existing liability limits on your current insurance policies.
- You have extensive assets to protect in the event of a lawsuit.
Those who are affluent have some of the greatest concern, due to the fact that in our litigious society, people are more likely to sue those who appear to have the means to pay.
How Much Does New Jersey Umbrella Insurance Cost?
Since your New Jersey umbrella insurance policy provides "excess liability" coverage, there is a lower risk to insurers that it will have to be applied. Since the risk is low, the cost for additional umbrella insurance can be much less than what you pay for the main liability coverage you have on your existing policies. Generally, an umbrella policy averages around $200 to $300 annually so it is fairly affordable. Of course, just like any insurance policy, there are a variety of factors that influence your pricing, including the amount of coverage you choose for your umbrella policy. These policies are sold in increments of $1 million.
New Jersey Umbrella Liability Discounts
You may qualify for a discount on your umbrella insurance premium if you meet the following criteria:
- You may qualify for a senior discount if you over a certain age, which can vary by insurance company.
- Many insurers may offer a discount if you have a safe driving record.
- A claims-free insurance record may also qualify you for a lower premium.
- Most insurers will check your credit score before issuing an umbrella policy, and you will qualify for a better premium rate if you have a good credit rating.
Be sure to ask your agent about all available discounts.
Compare New Jersey Umbrella Insurance Quotes
The cost of a New Jersey umbrella insurance policy can vary from insurer to insurer. For this reason, it is a good idea to get New Jersey umbrella insurance quotes from several different companies. A local independent agent in our network can be an excellent resource when it comes to comparing multiple policy options and costs. A member agent can help you compare rates on New Jersey umbrella insurance and assist you in choosing an affordable policy that’s right for you.
Contact an independent agent today to find the policy that best fits your budget and provides the protection you need.