Would you recommend an umbrella policy?

7 Replies

I currently don’t plan on using an LLC for my rental properties, because I’m doing owner occupied properties and househacking my first couple with VA and FHA. Something I’ve been thinking about lately is having reserves for when things go wrong. Which led me to what if things really go wrong? I’m thinking about looking around for an umbrella policy. Would any one recommend this if I’m not buying properties through an LLC currently? Would you recommend getting in to having an LLC ASAP?

Use an umbrella. I mentioned here many times, when the LLC gets sued, they sue you along with it. When you get liability insurance for the LLC, you'll have to get an endorsement to cover you as well, because they sue you anyway.

If you use a PM, it's a little different, but it doesn't sound like you are.

I’d recommend an umbrella policy for just about anyone who has assets over as few tens of thousands of dollars.

We live in a litigious society and whether something happens in your backyard, while driving your car, or on a property you own, the extra million in coverage will definitely help.

Plus, for a few hundred dollars a year, it’s a no-brainer. (Plus adding an umbrella policy might actually reduce some of your other premiums too!)

Yes get an umbrella policy. You do not need the LLC at this stage, it is simply another form of insurance. Unless something extremely unfortunate happens an umbrella policy is usually sufficient.

Get an umbrella policy and lower your other coverages to minimums allowed by umbrella.

In other words, the umbrella might require you have minimum underlying insurance of $250,000. Only buy the minimums because the umbrella cover is usually cheaper.

I buy more than $1,000,000 in umbrella cover. I’ve got a $3,000,000 personal umbrella and a $10,000,000 commercial umbrella. I work in insurance so I’ve seen the crazy lawsuits for the last 30 years.

I went the umbrella policy route and I feel great about it. I think LLCs are overkill and they don't necessarily provide the 100% protection people think they do. Umbrellas are inexpensive and offer the same level of coverage, or more.