can no longer purchase umbrella insurance after 10 properties?

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can no longer purchase umbrella insurance after 10 properties?

Joanne Tsai
Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes

Hello BP fellow,

Recently my husband and I were told by our insurance agent that since we just reached our 10 properties, we will no longer be eligible for purchasing a conventional umbrella insurance shall we decide to buy another rental property. This sounds a little weird to me, but after calling a few other insurance companies, it seems the threshold of 10 is fairly common. 

We currently own the rentals under our own names (instead of LLC), and we've heard from enough podcasters to skip LLCs and get a big umbrella insurance. I just want to check with the group, are you finding the same challenge with getting an umbrella insurance with increase amount of properties. What do you do to get around it? which insurance company? is there a solution to this?

Thanks!

Joanne

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Quote from @Joanne Tsai:

Hello BP fellow,

Recently my husband and I were told by our insurance agent that since we just reached our 10 properties, we will no longer be eligible for purchasing a conventional umbrella insurance shall we decide to buy another rental property. This sounds a little weird to me, but after calling a few other insurance companies, it seems the threshold of 10 is fairly common. 

We currently own the rentals under our own names (instead of LLC), and we've heard from enough podcasters to skip LLCs and get a big umbrella insurance. I just want to check with the group, are you finding the same challenge with getting an umbrella insurance with increase amount of properties. What do you do to get around it? which insurance company? is there a solution to this?

Thanks!

Joanne

You can simply up your liability coverage on properties 11+
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  • Jason WrayPro Member
    Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
    2y

    Joanne,

    You need to consolidate those (10) properties into a Blanket commercial loan. They will be removed from your credit and you start all over again from property one. You can also use a DSCR loan to buy more properties but I would suggest looking at a Blanket loan. You only need 5 doors or 5 properties total.

    Example (2) duplex's equal 4 doors you would simple include a SFR - single family to have the full 5 doors.

    [email protected]727-637-4289
    1Reply
  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 676 posts · 259 votes
    2y
    Quote from @Joanne Tsai:

    Hello BP fellow,

    Recently my husband and I were told by our insurance agent that since we just reached our 10 properties, we will no longer be eligible for purchasing a conventional umbrella insurance shall we decide to buy another rental property. This sounds a little weird to me, but after calling a few other insurance companies, it seems the threshold of 10 is fairly common. 

    We currently own the rentals under our own names (instead of LLC), and we've heard from enough podcasters to skip LLCs and get a big umbrella insurance. I just want to check with the group, are you finding the same challenge with getting an umbrella insurance with increase amount of properties. What do you do to get around it? which insurance company? is there a solution to this?

    Thanks!

    Joanne


     There are insurance companies that will insure more than 10 properties on a personal umbrella but it can be tricky based on the companies providing the underlying insurance, the makeup of the portfolio, the state you're in, etc.  It's also likely to be more expensive than what you have now but that's all relative.

    Royal Oath Insurance Group4.9203 Reviews
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    1Reply
  • Anthony Dupre
    Member since 2019 · 42 posts · 8 votes
    2y

    @Jason Wray,what impact having a blanket alone will have on her insurance? will it be consider then as 1 property because they are all under one loan ?

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y
    Quote from @Joanne Tsai:

    Hello BP fellow,

    Recently my husband and I were told by our insurance agent that since we just reached our 10 properties, we will no longer be eligible for purchasing a conventional umbrella insurance shall we decide to buy another rental property. This sounds a little weird to me, but after calling a few other insurance companies, it seems the threshold of 10 is fairly common. 

    We currently own the rentals under our own names (instead of LLC), and we've heard from enough podcasters to skip LLCs and get a big umbrella insurance. I just want to check with the group, are you finding the same challenge with getting an umbrella insurance with increase amount of properties. What do you do to get around it? which insurance company? is there a solution to this?

    Thanks!

    Joanne

    You can simply up your liability coverage on properties 11+
    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    3Reply
  • Jonathan Bock
    Accountant · Bryn Mawr, PA · Member since 2023 · 409 posts · 321 votes
    2y

    @Joanne Tsai

    Your agent should be able to help you shop this.  I have used USLI.  

    0Reply
  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 676 posts · 259 votes
    2y
    Quote from @Russell Brazil:
    Quote from @Joanne Tsai:

    Hello BP fellow,

    Recently my husband and I were told by our insurance agent that since we just reached our 10 properties, we will no longer be eligible for purchasing a conventional umbrella insurance shall we decide to buy another rental property. This sounds a little weird to me, but after calling a few other insurance companies, it seems the threshold of 10 is fairly common. 

    We currently own the rentals under our own names (instead of LLC), and we've heard from enough podcasters to skip LLCs and get a big umbrella insurance. I just want to check with the group, are you finding the same challenge with getting an umbrella insurance with increase amount of properties. What do you do to get around it? which insurance company? is there a solution to this?

    Thanks!

    Joanne

    You can simply up your liability coverage on properties 11+

     This defeats the purpose of having the umbrella

    Royal Oath Insurance Group4.9203 Reviews
    WebsiteView Page
    0Reply
  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 676 posts · 259 votes
    2y
    Quote from @Anthony Dupre:

    @Jason Wray,what impact having a blanket alone will have on her insurance? will it be consider then as 1 property because they are all under one loan ?


     Nope, it won't.  I think maybe there was a misunderstanding of the original post.

    Royal Oath Insurance Group4.9203 Reviews
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    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y
    Quote from @Owen Rosen:
    Quote from @Russell Brazil:
    Quote from @Joanne Tsai:

    Hello BP fellow,

    Recently my husband and I were told by our insurance agent that since we just reached our 10 properties, we will no longer be eligible for purchasing a conventional umbrella insurance shall we decide to buy another rental property. This sounds a little weird to me, but after calling a few other insurance companies, it seems the threshold of 10 is fairly common. 

    We currently own the rentals under our own names (instead of LLC), and we've heard from enough podcasters to skip LLCs and get a big umbrella insurance. I just want to check with the group, are you finding the same challenge with getting an umbrella insurance with increase amount of properties. What do you do to get around it? which insurance company? is there a solution to this?

    Thanks!

    Joanne

    You can simply up your liability coverage on properties 11+

     This defeats the purpose of having the umbrella


     The purpose of the umbrellas is to have higher coverage for liability right? Most people set their liability on their primary insurance to $300k, then have the umbrella policy kick in after that to a higher amount. When you get your 11th property, get a policy then and up your premium to cover $1 million in liability. Its that simple. Its what the rest of us do.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    1Reply
  • Ryan B.
    Investor · Indianapolis, IN · Member since 2015 · 126 posts · 141 votes
    2y

    Just look for a commercial umbrella. It will do the same thing. I have a personal umbrella and a commercial umbrella from State Farm.

    1Reply
  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    2y

    USLI definately does more than 10 properties. I thought they were one of the largest umbrella companies but you’ll certainly find them with any Google search. 

    I did have to leave them last year because they had a $1million max liability if any rentals have a pool. So I had to switch to Hudson who I hadn’t heard of but also does more than 10 properties. I’m using them with a $5million limit. 

    Ps. Some umbrella companies have switched their base insurance requirement from $300/300 to $500/500k. 

    0Reply
  • Joanne Tsai
    OP
    Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes
    2y
    Quote from @Owen Rosen:
    Quote from @Joanne Tsai:

    Hello BP fellow,

    Recently my husband and I were told by our insurance agent that since we just reached our 10 properties, we will no longer be eligible for purchasing a conventional umbrella insurance shall we decide to buy another rental property. This sounds a little weird to me, but after calling a few other insurance companies, it seems the threshold of 10 is fairly common. 

    We currently own the rentals under our own names (instead of LLC), and we've heard from enough podcasters to skip LLCs and get a big umbrella insurance. I just want to check with the group, are you finding the same challenge with getting an umbrella insurance with increase amount of properties. What do you do to get around it? which insurance company? is there a solution to this?

    Thanks!

    Joanne


     There are insurance companies that will insure more than 10 properties on a personal umbrella but it can be tricky based on the companies providing the underlying insurance, the makeup of the portfolio, the state you're in, etc.  It's also likely to be more expensive than what you have now but that's all relative.

    @Owen Rosen thanks! is it possible to share the insurance companies which would be willing to provide such policy? we haven't got any luck with our own search. thanks! 

    0Reply
  • Joanne Tsai
    OP
    Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes
    2y
    Quote from @Ryan B.:

    Just look for a commercial umbrella. It will do the same thing. I have a personal umbrella and a commercial umbrella from State Farm.


     oh cool, let me check that out. thanks!

    0Reply
  • Joanne Tsai
    OP
    Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes
    2y
    Quote from @Bill B.:

    USLI definately does more than 10 properties. I thought they were one of the largest umbrella companies but you’ll certainly find them with any Google search. 

    I did have to leave them last year because they had a $1million max liability if any rentals have a pool. So I had to switch to Hudson who I hadn’t heard of but also does more than 10 properties. I’m using them with a $5million limit. 

    Ps. Some umbrella companies have switched their base insurance requirement from $300/300 to $500/500k. 

    @Bill B.

     thanks! I am def checking it out. 

    1Reply
  • Account Closed
    Rental Property Investor · New Braunfels, TX · Member since 2022 · 408 posts · 408 votes
    2y
    Quote from @Joanne Tsai:
    Quote from @Bill B.:

    USLI definately does more than 10 properties. I thought they were one of the largest umbrella companies but you’ll certainly find them with any Google search. 

    I did have to leave them last year because they had a $1million max liability if any rentals have a pool. So I had to switch to Hudson who I hadn’t heard of but also does more than 10 properties. I’m using them with a $5million limit. 

    Ps. Some umbrella companies have switched their base insurance requirement from $300/300 to $500/500k. 

    @Bill B.

     thanks! I am def checking it out. 

    I agree with Bill, our Farmers umbrella policy was non-renewed in June of 2023 for being over 10 rentals and we switched to USLI. 
    0Reply
  • Daniel Sperling
    Lender · Baltimore, MD · Member since 2019 · 37 posts · 34 votes
    2y

    There's a lot of shenanigans going on right now with property and casualty insurance where, beyond raising premiums ~20% YoY, many carriers are limiting the number of properties they will cover and many agents are not specialized in commercial coverages. It's a good time to shop all policy options -- landlord insurance, commercial umbrella, personal umbrella.

    0Reply
  • John Mocker
    Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
    2y

    Joanne,

    USLI was mentioned as one "stand alone" umbrella source (means they do not have to write the underlying home & auto).  Another is PersonalUmbrella.com.  They only work through agents.  Their guidelines vary by state.  In NJ I believe they will do up to 30 units total (max of 4 units per bldg).  If your agent can not access them PM Me and I will see if I can get you a list of their agents in NJ

    0Reply
  • Jane Z.
    GA · Member since 2011 · 62 posts · 6 votes
    2y

    We have been struggled on and off with landlord and umbrella insurance for our 12 rental properties for many years. Currently AllState provides landlord insurance for all 12 rental properties. AllState used to have 10 properties limitation, then removed it because we did not have any claim. Hudson provides umbrella insurance for home/auto and 12 rentals. However, we just received Hudson's renewal letter that they don't provide umbrella insurance for auto any more. My insurance agent thinks one possible solution is to have AllState provides umbrella insurance for home/auto only. AllState's umbrella insurance have 9 rentals plus 1 home limitation (max 10). Therefore, it could not cover all 12 rentals. Besides it is very expensive when includes rentals in their umbrella insurance. But that means my home would be insured under both AllState and Hudson, which I don't want. But even this is cheaper than AllState umbrella insurance with 9 rentals plus 1 home. My insurance agent will ask whether Hudson could remove my home for their umbrella insurance policy. Hopefully this will be the solution. 

    0Reply
  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 676 posts · 259 votes
    2y
    Quote from @Jane Z.:

    We have been struggled on and off with landlord and umbrella insurance for our 12 rental properties for many years. Currently AllState provides landlord insurance for all 12 rental properties. AllState used to have 10 properties limitation, then removed it because we did not have any claim. Hudson provides umbrella insurance for home/auto and 12 rentals. However, we just received Hudson's renewal letter that they don't provide umbrella insurance for auto any more. My insurance agent thinks one possible solution is to have AllState provides umbrella insurance for home/auto only. AllState's umbrella insurance have 9 rentals plus 1 home limitation (max 10). Therefore, it could not cover all 12 rentals. Besides it is very expensive when includes rentals in their umbrella insurance. But that means my home would be insured under both AllState and Hudson, which I don't want. But even this is cheaper than AllState umbrella insurance with 9 rentals plus 1 home. My insurance agent will ask whether Hudson could remove my home for their umbrella insurance policy. Hopefully this will be the solution. 


     Allstate (captive) is not a good place to be if you need any sort of sophistication with your risk management

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    0Reply
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