Insurance Explained: Who Needs Renters and Umbrella Insurance Policies?

It could be argued that we all know that the law requires car insurance for all drivers and that homeowners must maintain insurance for any home for which there is still an outstanding loan. But with so many other policy options available, how does the average person know what is really needed and what is an extravagance? 

Throughout this year, Rochester Women magazine will run a series of articles related to general insurance needs to help educate and remove some of the unease associated with understanding which policies are, if not mandatory, strongly recommended and how to get those policies for the best price. We start with renters insurance and umbrella policies. 


Who needs renters insurance, and what does it cover?  Do college students renting their first apartments need or benefit greatly from renters insurance?  The easy answer to both questions is no. According to State Farm agent Sue Madden, college students who are still claimed as dependents on their parents’ taxes do not usually require additional renters insurance, as they should still be covered under their family’s homeowners insurance. However, once no longer considered a dependent, the new adult should seek at least minimal coverage to protect their belongings against damage or theft, as well as the liability against injuries. 

Like homeowners insurance, renters insurance provides the peace of mind that your belongings can be replaced and that any financial responsibility incurred due to accidental injury is covered. “Sometimes lawsuits don’t just go after one party (such as the landlord),” Madden explains. “If someone came to your apartment and you left something out and they tripped and fell down the stairs, you could be named in a lawsuit.” Renters insurance can alleviate the worry of being left paying out of pocket for the replacement of personal belongings due to theft or damage and also assures financial protection in the event of a lawsuit due to an injury at your rental home.


The phrase “umbrella insurance” is familiar to most, but what is it exactly? Madden explains that this low-cost add-on option may be the most valuable insurance available to policyholders. As the name implies, the umbrella policy is purchased in addition to any other type of insurance policy you have already purchased. This extra insurance provides an “umbrella” that shields the insured from claims that surpass the limits of the typical insurance policy. Madden explains, “It works as a safety net to prevent financial ruin in the event of a very serious accident where one reaches the limits of what a particular policy will pay. In situations that become threateningly expensive, the umbrella policy may be your safeguard from losing most of your assets. 

According to attorney Doug Boese with Dunlap & Seeger, P.A., “Your house, land, cabin, boat, business, life insurance policies, savings and checking accounts, and retirement accounts are all at risk if you do not have an umbrella policy.” The umbrella policy offers one more safeguard for the policyholder. 

Madden explains, “It protects your assets if you’re sued, and it kicks in after all of your other policies reach their limits. And, for most people, that umbrella policy can be a very minimal cost,” coming in as reasonable as $100 to $200 per year. 

While all of these insurance options are relatively reasonable by themselves, they can become expensive when added together. By “bundling” your insurance policies together with the same insurance agent, you can often find price break incentives. Additionally, loyalty programs offered by many insurance companies offer discounts to policyholders who stay with the same company for an extended period of time.

Catherine H. Armstrong holds a B.A. in Journalism from the University of Oklahoma and is the author of The Edge of Nowhere, released in January 2016.  For more information visit