Umbrella Policy vs LLC

[NaTarrio Jones]

Hello BP.  I have 3 units (Texas) in my personal name and I have a four unit (Louisiana) under contract also in my personal name.  I do have an LLC but my intent is to max out my conventional loans before I begin to purchase with LLC. I came across an older post in which you mentioned you had an umbrella policy to cover your properties therefore not needed to purchase in LLC for assest protection.  Is this an effective stategy.  What would you recommend in my situation?  Do you purchase 1 umbrella policy that covers all your properties? If so do they all have to be in the same state? If you can point me in the right direction it will be much appreciated it. Thanks

[Jason D.]

@NaTarrio Jones they are 2 different things and are not a "one or the other" decision.

In a nutshell, the LLC protects your personal assets from the liability of the LLC, and the umbrella policy protect the entity from liability.

For instance, someone falls at your property within an LLC. They sue the LLC, and can not go after your personal assets because they are separate entities. But the insurance covers the LLC from having to liquidate ITS assets to pay the lawsuit.