Post Eagle Newspaper


Apr 20, 2024

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Tips To Consumers Considering
Umbrella Insurance

TRENTON, NJ – Department of Banking and Insurance Commissioner Ken Kobylowski  provided shopping tips for consumers and small business owners who are considering purchasing umbrella insurance, which covers individuals or businesses for liability in excess of underlying insurance limits and, in certain cases, legal defense and liability coverage generally excluded by standard policies.

“Individuals and business owners concerned about exposed personal assets and financial holdings may want to consider purchasing umbrella insurance,” said Commissioner Kobylowski. “The coverage is relatively inexpensive and can yield valuable protection for unforeseen but very real and significant damages that people are held legally responsible for every day in court.”

Umbrella insurance is typically sold by insurance agents or carriers who also provide property and casualty coverage such as auto, homeowners, boaters and motorcycle insurance. Common umbrella policies provide an additional $1 million or more in liability coverage above underlying liability limits such as $300,000 to $500,000. For example, if an insured driver with liability limits of $500,000 was responsible for property damage, injuries and lost wages of multiple individuals for a total of $750,000, the primary auto policy would pay up to the limit and the remaining $250,000 would be paid by the umbrella coverage. Otherwise, without the umbrella policy, an individual’s personal assets could be exposed to pay for the damages.

Umbrella insurance coverage is relatively inexpensive, costing from $200 to $300 for the first $1 million in liability limits. Additional benefits may also be provided, depending on the terms of the umbrella policy offered. These may include coverage for claims possibly not provided for in underlying policies like libel, slander or defamation of character. Many also extend costs for legal defense and expand coverage to anywhere in the world.

Business owners may also want to think about including a commercial liability umbrella policy in their risk management program. Coverage could increase liability damages per incident as well as boost coverage for commercial auto, workers’ compensation and lawsuit defense.

“Umbrella insurance may not be for everyone,” said Commissioner Kobylowski. “However, for those with significant valuable assets at risk, additional coverage may be warranted. Consumers should check with their New Jersey licensed agent or carrier representative before purchasing insurance.”

To confirm online that a company is licensed

To confirm online that an insurance agent is licensed:

Consumers who are unable to resolve an issue with an insurance carrier should contact the Department at 609-292-7272 or call the Department’s consumer hotline at 1-800-446-7467. Consumers who want to file a complaint online can go to

New Jersey Department of Banking and Insurance