Two highway signs on the New Jersey Turnpike

Who Needs Umbrella Insurance in NJ? 

Did you know that even when you purchase high liability limits on your auto policy, you may still be exposed to the potential risk of paying out of pocket when a liability lawsuit exceeds your limits? The fact is your high limits may not be enough to completely protect you in all circumstances. If you’re found to be negligent in a liability suit resulting from a serious car accident you caused, you could find yourself in a very difficult position financially. Depending on the severity of the accident and the court-awarded settlement, your auto policy limits could be exhausted rather quickly. If you are asking the question, “who needs umbrella insurance?” The answer is the person who finds themselves in a situation that involves their auto policy limits being exhausted. Liability lawsuits can be extremely expensive to settle and can easily lead to this situation. That’s where umbrella insurance, or “excess liability insurance,” comes in.

How Does Umbrella Insurance Help with Auto Losses?

Although various umbrella limits may be available from your insurance carrier, a personal umbrella policy usually provides an extra $1M of liability coverage that you will need to supplement your existing auto policy liability coverage when your policy limits have been exhausted. If you were to find yourself involved in a liability lawsuit resulting from an auto accident, it’s possible that the limits in your auto insurance policy could be drained, depending on the severity of the accident and the resulting litigation. An umbrella insurance policy provides an extra layer of protection that comes into play if and when the underlying coverage limits on your existing auto policy have been exhausted. Most insurers will require a (higher range) minimum liability limit before adding additional liability coverage in the form of an umbrella policy.

Do You Need Umbrella Insurance?

Accidents happen, and no one expects to end up in court defending themselves against serious litigation. Being found negligent does not mean that you’re a criminal, but it could force you to exhaust your savings to defend yourself. According to the Foundation for Fair Civil Justice (FFCJ), New Jersey is one of the most litigious state in America. This means that more people are sued in NJ than most other states in the country. If you have significant assets or savings, you could be a more likely target for litigation and may find umbrella coverage to be an especially attractive additional coverage.

If you’re sued in New Jersey and the court system determines that you’re liable for injury that you caused to another party as a result of an auto accident, you likely will be required to pay. If the other party is awarded a financial amount that exceeds the limits on your auto insurance policy, an umbrella policy would then kick in to extend an additional amount of liability coverage. If you don’t have umbrella insurance you may have to pay a lot out of pocket and even have your wages garnished until the awarded amount has been satisfied.    

 Some Expenses Covered by Umbrella Insurance

  •       Legal Defense Costs – Attorney fees can run $150 per hour or higher.
  •       Pain and Suffering – Emotional pain and suffering awards can be substantial.
  •       Bodily Injury – Serious bodily injury such as loss of limbs or paralysis can cost millions.
  •       Personal Injury – Mental, emotional or bodily injury awards can exceed even high liability limits.
  •       Loss of Wages – If liable in a serious accident that prevents a victim from continuing normal employment, a plaintiff’s average wages earned, multiplied by future years worked adds up to a lot of money.

 Final Thoughts on Umbrella Insurance

Typically, you can purchase a personal umbrella insurance policy with a $1,000,000 limit for less than $200 per year. Umbrella insurance is often billed as a product that is mainly important to individuals with high net worth. But while it is true that the more wealth you have, the more you have to risk by not carrying umbrella insurance, policyholders across the board will find potential value in umbrella coverage. An umbrella policy can also supplement the liability coverage on your homeowner policy and other personal lines products, like watercraft or recreational vehicle (RV) insurance. To find out more information about how the cheapest insurance is not the best, how much car insurance New Jersey drivers need or common mistakes that people make when purchasing, just click the links.

Plymouth Rock Assurance understands the liability risk that policyholders assume when they get behind the wheel of their vehicles each day. Offering reliable protection and expert advice to NJ drivers for decades, Plymouth Rock provides custom auto policy coverages and outstanding service and rewards programs. Call today for a customized quote on auto, home or umbrella insurance.            

Call 855-993-4470, get your free quote online or find a local agent to see how Plymouth Rock Assurance can help you know who needs umbrella insurance in New Jersey. If you need additional information, please visit our Contact Us page.