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Landlord Insurance vs Umbrella Insurance
July 30, 2021 at 4:00 AM
Understand the difference between landlord insurance vs umbrella insurance.

Many people are familiar with the most basic types of insurance policies: health, auto, homeowners, etc. However, there are also more niche policies out there that are geared towards very specific demographics, such as people who rent out one or more properties.

Two that tend to confuse our clients more regularly than others are umbrella insurance and landlord insurance. While the two do have certain similarities, there are also stark differences that can make one policy favorable over the other depending on your particular situation. This helpful guide breaks down landlord insurance vs umbrella insurance to help you decide which one is right for you.

What is landlord insurance?

As the name indicates, landlord insurance is a policy specifically created for individuals who rent out one or more properties that they own. There are two main components to a landlord insurance policy, but both are designed to provide financial protection in the event that there is a problem with your property or the person renting it.

The landlord property protection portion of these policies covers the physical property itself. This includes the dwelling (whether it’s a home, condo, or apartment), other structures on the property such as a detached garage or fence, and personal property used to maintain the rental. If any of these are damaged, your policy will kick in and pay to have them repaired or replaced.

The second component of this policy is the landlord liability protection, and it’s more geared towards providing financial security in the event that a lawsuit is filed against you. When you have landlord insurance and someone is injured on your property, your insurance provider will pay for the damages up until the point where you reach the limit on your deductible.

What is umbrella insurance?

Umbrella insurance is a type of policy that implements extensive coverage options on scenarios that aren’t typically covered by any other kind of policy. They were introduced as a way to give policyholders peace of mind knowing their finances won’t be ruined in the event of a significant and potentially devasting liability claim or lawsuit, and the coverage extends to their entire family.

This type of personal liability insurance can be used in a variety of situations, including these examples:

  • If your dog gets out and bites another person, who then sues you for their medical bills.
  • If you accidentally cause a pile-up on the highway and the cost to repair all of the affected cars is greater than your auto insurance deductible.
  • If you prepare food for a party and the people who eat it get food poisoning.

Basically, umbrella insurance covers you if either someone or their property is damaged and you are liable.

So who wins the landlord insurance vs umbrella insurance debate?

The likely less than satisfying answer is that neither wins outright. While both policies do extend liability coverage, they do so in different ways. You should opt for landlord insurance if you are actively renting out one or more properties, because it’ll ensure that you receive financial reparations when the property is damaged or a renter doesn’t pay what they owe.

For umbrella insurance, the general rule of thumb is that you should have it if the total value of your assets exceeds the amount of your auto or homeowners insurance deductibles. If your deductibles are lower than your overall value, you could use your assets in a lawsuit, but an umbrella policy will cover the costs if you have one.

Still have questions about landlord insurance vs umbrella insurance?

Then get in touch with our team here at Gleetopia Insurance. As one of the leading family-owned independent insurance agencies, we’ve worked hard to build valuable relationships with some of the industry’s leading carriers like Travelers, Nationwide, and Progressive.

That means that no matter what your needs are, our team is confident that we can find the ideal combination of policies to ensure you have the coverage you need at an affordable rate. You can browse all of the insurance products we offer, or connect with us online to schedule your quote.