Defining the Terms: Umbrella and Rider

We are certified inventory professionals, offering documentation of home or business contents. The most commonly known reason for collecting this information is to be prepared in the event of a loss (file, theft, natural disaster) resulting in a need to file an insurance claim.


This translates to many who think that we are experts in the insurance field as well. We are often asked by clients if we think they are sufficiently insured, what types of additional insurance they should purchase, etc. Our immediate response is that we are not insurance professionals and we leave those discussions up to the insurance agents.


With that said, our main purpose for all of our marketing, public speaking opportunities, and this newsletter, is to provide education about the inventory industry. Much of this information, of course, includes insurance. We have learned over the years that there is some confusion between an umbrella policy and a rider.


Umbrella insurance


Investopia explains that this is extra liability coverage that goes beyond the limits of your homeowner’s, auto, or watercraft insurance policy. It is purchased to provide you, the policyholder, with additional insurance for injuries caused to others in an accident or if you cause damage to other people’s property.


Umbrella policies also protect against libel, vandalism, slander, and invasion of privacy. This additional insurance is very helpful when you are sued and the dollar amount exceeds your original policy.


Rider or Scheduled Personal Property


You purchase homeowner’s or renter’s insurance to cover losses of personal property so you can have the funds required to get you back where you were before the incident. However, coverage is limited to the amount of your policy, and many policies have items with a stated limit of coverage that will rarely fully replace these specific items. For example, a common limit for jewelry can be only $1,500. Some other items that face restrictions on standard coverage are artwork, antiques, sports equipment, firearms, and collectibles.


To ensure proper coverage and the ability to replace these belongings after a loss, you might require additional coverage. This option is called Scheduled Personal Property, or a rider to your insurance policy. These riders make it possible to cover special items for the appraised or assessed value.


So, now when you’re discussing your homeowner’s or renter’s insurance with your family, friends, or insurance agent, you’ll know that an umbrella policy covers liability and a rider covers your higher value home or business contents.