Renters may think that because they don't own their homes they don't need umbrella liability insurance, which provides coverage on top of other policies.
In most cases, they would be wrong. Umbrella coverage, regardless of whether you're a homeowner, can shield you from potential financial ruin.
Such policies offer a minimum of $1 million of additional liability protection and cost just a few hundred dollars a year, says Frank N. Darras, an insurance attorney and founding partner of DarrasLaw, a law firm based in Ontario, Calif.
"Liability insurance is inexpensive and a must-have, whether you're coming out of college, transitioning out of foreclosure or a senior who is starting to rent because you have sold your home or lost your home," Darras says.