Part of adulting these days is familiarizing one’s self with all forms of insurance – homeowner’s insurance, private mortgage insurance, and now – umbrella insurance. Umbrella insurance kicks in when your homeowner’s insurance has reached its limit, potentially protecting your net worth from financial ruin.
For instance, if someone gets injured on your property, inside or outside, regardless of fault, you could be sued. Umbrella insurance adds a layer of protection against all kinds of suits that could pop up in worst-case-type-scenarios.
It’s important to note that like any insurance policy, it has its limits too. Home-based businesses are not covered, and neither are domestic workers, so babysitters, house cleaners, or others should have a standard policy, according to Richard Koreto.