Umbrella policy
An extra liability policy on top of homeowners and auto. Kicks in when the underlying policy limits are used up. Used more often by owners with rental properties.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
An umbrella policy sits above homeowners and auto liability, and landlords carry them because tenants and visitors can sue. It has no place in a sale except that a rental's insurance history is part of what an investor buyer reviews.
Part 2 of 4
A simple example
You own a rental and carry a $1 million umbrella above the landlord policy. A visitor's injury claim exceeds the underlying limit and the umbrella pays the rest.
| The claim | Which policy pays |
|---|---|
| Under the homeowners liability limit | The homeowners policy |
| Above it | The umbrella, up to its limit |
| After you sell | Coverage for the home ends; the umbrella continues on what you still own |
An umbrella is liability coverage beyond the limits of everything under it.
Part 3 of 4
What people get wrong
That an umbrella covers the house itself. It covers lawsuits against you, not damage to property.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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