Do you need insurance for your insurance? Technically, that is what umbrella insurance is ? additional coverage for your existing homeowner?s and automobile insurance policies. While this type of policy is not right for everyone, umbrella insurance is something that all homeowners should understand in case they reach a point where such a policy becomes prudent.
Umbrella insurance protects you in the event that your homeowner?s or auto insurance cannot cover the costs of an accident you are involved in. In an article entitled ?Umbrella Coverage for Preventing Your Ruin,? The New York Times paints the following scenario ? or rather ? nightmare, as Times writer Joseph Treaster put it.
?Your car skids. You crash into a Mercedes with a highly paid business executive at the wheel. He?s hurt so badly he cannot return to work. A jury awards him millions of dollars and you have to pay it.?
While the chances of this situation may be slim, if such an unfortunate day were to come, would you your assets be safe? If your homeowner?s or auto insurance policy in New Jersey cannot cover the costs of an accident, an umbrella insurance policy could save you from financial ruin. The difference an umbrella insurance policy can make in this situation could be the difference of keeping your life savings, keeping your home, and keeping your salary.
ABC Action News clarifies that while umbrella insurance is most commonly purchased by wealthy individuals, ?not-so-wealthy people also can benefit from the extra coverage if they own a home or condominium with a pool or trampoline, if they own a dog or if they have teenage drivers.?
In the past, umbrella policies were sometimes viewed as ?paranoia insurance.? But today, umbrella policyholders are simply facing the reality that we live in a ?lawsuit-happy society,? as one finance blogger David Bakke explains it. Umbrella insurance, in Bakke?s layman terms, can be viewed as ?lawsuit insurance.?
Umbrella policies are sold in $1 million increments. Since umbrella policies only go into effect when the underlying policies will not suffice, policyholders are required to have a certain amount of liability already in place with auto and homeowner?s policies.
There are a few ways to approach the decision of whether you should pursue an umbrella policy with an independent insurance broker in New Jersey. First, determine your net worth to see if it exceeds $1 million. Next, evaluate your lifestyle, including your place of residence, job, hobbies, and any other factors that increase your risk. Finally, decide how having an umbrella insurance policy in New Jersey will affect your peace of mind.
If are considering an umbrella insurance policy in New Jersey, contact one of our experienced agents here at Martin Financial Group, an independent insurance broker based in New Jersey, by calling 609-356-1500.
Image via Telnov Oleksii / Shutterstock
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