Landlord Insurance Recommendations

3 Replies

I am buying my first rental property and looking at just getting an insurance policy versus setting up an llc. Once I can figure out how to move the mortgage to my LLC without triggering the due on sale clause i will create the llc , and keep the insurance. To get started this seems to be the easiest.

Originally posted by @Misty Monk :

I am buying my first rental property and looking at just getting an insurance policy versus setting up an llc. Once I can figure out how to move the mortgage to my LLC without triggering the due on sale clause i will create the llc , and keep the insurance. To get started this seems to be the easiest.

LLC or no LLC you still want to have an insurance policy on any rental property. I recommend a liability policy of at least $300,000 per property.

 

My rule of thumb for what its worth.

If net wealth < $1M then $2M umbrella policy only

If net wealth >$1M then $2M umbrella policy plus LLC

Best, Terrell

Originally posted by @Misty Monk :

I am buying my first rental property and looking at just getting an insurance policy versus setting up an llc. Once I can figure out how to move the mortgage to my LLC without triggering the due on sale clause i will create the llc , and keep the insurance. To get started this seems to be the easiest.

Misty, if your loan will allow, you will want to start with a commercial lines policy. These policies allow you to hold the property in your personal name and in other entities like an LLC, Trust, etc.

If you start with a Personal lines policy, once you transfer the property into the LLC, they may not continue to insure the property and require you to move it to a commercial policy.

 

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