Do I need umbrella policy if rental property insurance also includes liability

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Do I need umbrella policy if rental property insurance also includes liability

Moses Lee
Member since 2023 · 1 post · 0 votes

Just purchased my first investment property. I am currently shopping for insurance. At this stage, I don't think I need to set up an LLC, but I see a lot of people recommending getting an umbrella policy. I got a couple quotes that includes liability coverage. If the rental property insurance includes liability, is it also a good idea to get an umbrella policy as well? I do plan on purchasing more properties in the future, but not anytime soon.

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Owen RosenBusiness Member
Professional · Clinton Township, MI · Member since 2015 · 678 posts · 259 votes
2y
Quote from @Moses Lee:

Just purchased my first investment property. I am currently shopping for insurance. At this stage, I don't think I need to set up an LLC, but I see a lot of people recommending getting an umbrella policy. I got a couple quotes that includes liability coverage. If the rental property insurance includes liability, is it also a good idea to get an umbrella policy as well? I do plan on purchasing more properties in the future, but not anytime soon.

It depends on what you're trying to protect. Your insurance agency should discuss these things with you but unfortunately many aren't properly trained or simply take orders rather than provide valuable advice...
Royal Oath Insurance Group4.9203 Reviews
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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    2y

    How much insurance coverage you have is a matter of choice.  I have had an umbrella policy for many years now.  They aren't that expensive.

    An umbrella policy does more than provide you additional liability coverage for your rent properties.  It also protects your rent properties from YOU!  If you do something, like a nasty car accident, that gets you sued, the umbrella provides coverage there too.

    1Reply
  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 678 posts · 259 votes
    2y
    Quote from @Moses Lee:

    Just purchased my first investment property. I am currently shopping for insurance. At this stage, I don't think I need to set up an LLC, but I see a lot of people recommending getting an umbrella policy. I got a couple quotes that includes liability coverage. If the rental property insurance includes liability, is it also a good idea to get an umbrella policy as well? I do plan on purchasing more properties in the future, but not anytime soon.

    It depends on what you're trying to protect. Your insurance agency should discuss these things with you but unfortunately many aren't properly trained or simply take orders rather than provide valuable advice...
    Royal Oath Insurance Group4.9203 Reviews
    WebsiteView Page
    1Reply
  • Jonathan SmallPro Member
    Investor · Suwanee, GA · Member since 2020 · 182 posts · 151 votes
    2y

    I have a 2M umbrella insurance policy for about $400 a year.  Worse case is that I am over insured and wasted $400 a year.  Best case I have additional insurance and protection. I think it is a good idea.  

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