Do I Need Umbrella Insurance on Long Island? 7 Situations to Consider
Many Long Island homeowners have insurance for their homes and vehicles but may not realize that those policies have liability limits. If a serious covered claim exceeds those limits, personal umbrella insurance may provide an additional layer of protection.
A personal umbrella policy generally works above eligible underlying policies such as homeowners, renters and auto insurance. New York’s Department of Financial Services notes that umbrella policies commonly provide higher liability limits, often beginning at $1 million, and insurers may require minimum underlying liability limits before an umbrella policy can be issued.
So, who should consider umbrella insurance? There is no single answer for every household, but these seven situations are worth reviewing.
1. You Own a Home on Long Island
Owning a home creates liability exposures that renters may not have. Someone could be injured on your property, and a serious claim could potentially exceed the liability limit on your homeowners insurance.
Your home equity, savings, investments and other assets are also worth considering when deciding how much liability protection makes sense.
Umbrella insurance is designed to provide additional liability coverage after the applicable limits of an underlying policy have been reached.
2. You Have a Teen or Young Driver
Adding a new driver to the household can increase your potential liability exposure.
A serious auto accident involving a household driver could result in bodily injury or property damage claims that exceed the liability limits of an auto policy. An eligible umbrella policy may provide additional protection once the underlying auto liability coverage has been exhausted.
A serious auto accident involving a household driver could result in bodily injury or property damage claims that exceed the liability limits of your auto insurance.
3. You Own a Pool
Pools are popular throughout Nassau County and Suffolk County, but they also create additional liability exposure.
If a guest is seriously injured in or around your pool, the resulting claim could be substantial. That makes it important to review both your homeowners liability limit and whether additional umbrella coverage makes sense for your household.
Swimming pools are another exposure specifically identified by the Insurance Information Institute when discussing reasons to consider umbrella insurance.
4. You Own a Boat or Other Watercraft
Living on Long Island means boating and time on the water are part of life for many families.
Depending on the type, size and use of your boat or watercraft, an umbrella policy may provide additional liability protection above an eligible underlying policy.
Coverage requirements differ by insurer, so boats and other recreational exposures should always be disclosed when requesting an umbrella quote.
This is especially important because umbrella coverage is not identical from carrier to carrier.
5. You Own a Rental Property
Rental property can create liability exposure beyond your primary residence.
If a tenant, visitor or other person is injured at a rental property and you are held legally responsible, a serious claim could potentially exceed the liability limits of the underlying landlord insurance.
Some umbrella policies can provide additional liability coverage for eligible rental properties, but the property generally needs to be properly disclosed and meet the carrier’s underlying insurance requirements.
6. You Have Significant Savings, Investments or Home Equity
Umbrella insurance is not only for extremely wealthy households.
The more assets you have accumulated, the more reason there may be to review whether the liability limits on your homeowners insurance and auto insurance are sufficient for your situation.
New York DFS specifically notes that consumers with assets they want to protect may want to consider personal umbrella coverage above their primary home and auto policies.
Coverage needs are personal, so the appropriate umbrella limit should be based on your assets, household risks, underlying insurance and overall financial situation.
7. You Want More Liability Protection Than Your Home and Auto Policies Provide
This is ultimately the main reason umbrella insurance exists.
Homeowners insurance and auto insurance provide liability protection, but each policy has a maximum limit. An umbrella policy can add another layer of liability insurance above eligible underlying coverage.
Umbrella policies may also cover certain personal liability claims that are not typically handled the same way by an underlying policy, depending on the policy terms. New York DFS notes that umbrella coverage commonly includes certain personal offenses such as libel, slander, false arrest and invasion of privacy.
How Much Umbrella Insurance Do You Need?
There is no universal amount that is right for everyone.
Factors to consider include:
Home equity and other real estate
Savings and investments
Number of vehicles and household drivers
Teen or inexperienced drivers
Rental properties
Pools
Boats and recreational property
Your current homeowners and auto liability limits
Other household liability exposures
Personal umbrella policies commonly start at $1 million, although higher limits may be available. Insurers may also require minimum liability limits on your underlying home and auto policies before they will issue umbrella coverage.
Umbrella Insurance Quotes for Long Island and New York State
The Town Agency has been helping Long Island families with their insurance needs since 1968.
From our Garden City office, we help clients throughout Nassau County, Suffolk County, NYC and across New York State compare personal umbrella insurance options from multiple carriers.
We can review your existing homeowners insurance, auto insurance, landlord insurance and other liability coverage and help you understand how an umbrella policy may fit with those policies.
Ready to review your liability protection?
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