What is a Personal Umbrella Policy?

Most insurance policies will offer a decent amount of protection. There’s a limit to how much protection most policies will provide, though. Residents of New Jersey who want more coverage than their insurance policies will offer can often get additional protection through a personal umbrella policy.

Personal umbrella insurance is a secondary, supplemental insurance. Being a secondary insurance, it supplements primary, underlying insurance policies. A single umbrella insurance policy can be used to supplement several underlying policies at once. For instance, one personal umbrella policy might act as a secondary policy for a homeowners policy, car policy, boat policy and RV policy.

When supplementing underlying policies, an umbrella insurance policy may add to the underlying policies’ limits, fill in their coverage gaps or serve both purposes.

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What New Jersey Residents Might Benefit from a Personal Umbrella Policy?

While anyone might benefit from the extra protections that an umbrella policy offers, there are two situations where this type of insurance is especially useful. First, wealthy New Jersey residents may want the additional coverage that a policy provides to help shield them from potential lawsuits, since people sometimes target wealthy individuals in liability suits. Second, individuals who have an increased risk exposure might want the extra coverages that a policy can provide.

Some specific examples of people who might benefit a lot from getting a personal umbrella insruance policy include:

  • Anyone who has multiple residences or a sizeable nest egg
  • Dog owners whose canines are aggressive
  • Motor sports enthusiasts who own a dirt bike, ATV, or similar vehicle
  • Boaters who own or share a power or sailboat
  • Landlords who are concerned about potential lawsuits from tenants

These are just a few examples. Anyone who would like extra protection may be interested in a personal umbrella policy.

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Is Personal Umbrella Insurance Expensive?

Many factors influence how much personal umbrella insurance costs. Everything from a person’s location to the activities they participate in can influence how much a policy will cost them. For instance, a stay-at-home parent raising children in Sussex, NJ is exposed to different risks -- and, therefore, will pay different rates -- than someone who races boats near Ocean City, NJ.

In general, however, this is a highly affordable form of insurance. Because it’s a secondary form of insurance, insurers can usually offer relatively low premiums for a lot of coverage. Policies frequently provide at least $1 million worth of coverage at an affordable price, and they can offer much more than $1 million worth of protection.

How Can New Jersey Residents Get an Umbrella Policy?

Because personal umbrella insurance is a secondary form of insurance, the underlying policies that a personal umbrella policy will supplement must be carefully considered when purchasing an umbrella policy. Many personal umbrella policies have minimum primary coverage requirements, and an umbrella policy’s coverages may be voided if the underlying policies don’t meet these coverage requirements.

Need Help With Insurance?

New Jersey residents who would like a personal umbrella policy can shop for policies and review their primary policies’ coverages with the help of an independent insurance agent. An agent can first help compare personal umbrella policies’ rates and coverages, and then they can also help make sure that a resident’s underlying policies meet the coverage requirements of the umbrella policy they choose. With the assistance of an agent, residents can be confident in the umbrella policy they select.

Meet Your Industry Specialist

Jim Hickey

Mr. Hickey is a Partner and the President of Personal Lines. He was the President of Links Insurance Services, which he started in 2001. Jim grew Links Insurance to 40 employees by the time it became a division of World Insurance Associates in 2019.

Jim Hickey has been a top commercial and personal lines producer for the past 15 years and has guided the company to 18 years of year-over-year growth.

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