What is an umbrella policy?

An umbrella policy is a type of insurance policy offered to New Jersey residents that provides additional liability coverage beyond the limits stipulated in other policies they may hold. Basically, an umbrella policy acts as a supplement to the existing liability coverage they have and provides extra protection in the event of an accident or legal dispute. For example, say an individual holds a standard auto insurance policy, which covers the cost of damages in the event of an accident. However, if the damages awarded in the accident exceed the policy limits, the individual would then be personally liable for any additional costs. This is where an umbrella policy comes in – it provides additional protection by covering the balance of any damages awarded beyond the limits of the existing policy. An umbrella policy is not required but it is highly recommended as it provides financial protection for people in the event of an accident. It can also protect individuals from certain kinds of lawsuits, including those related to defamation, false arrest, or invasion of privacy. All in all, an umbrella policy is an additional form of insurance coverage that may be held alongside existing liability coverage, such as auto or home insurance, to provide extra protection in the case of an accident or dispute. It can help individuals cover damages beyond the limits of their existing policy and protect themselves financially from certain types of lawsuits.

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What is an umbrella policy?

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