Advice on extra insurance

Rental Property Investor · Myrtle Beach · Member since 2019 · 38 posts · 25 votes

Hey BP, I have a smaller portfolio of long term rentals and I am looking for some protection advice. I’ve been advised to look into an umbrella policy. Any of you out there have experience or advice on an avenue to pursue. I have a single family home and a quad unit in coastal Carolina. Both properties are in close proximity to the ocean. Thanks in advance, still a fairly new investor and can use all the knowledge available.

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Owen RosenBusiness Member

Professional · Clinton Township, MI · Member since 2015 · 732 posts · 272 votes

Quote from @Jared Martz:

Just for clarity an umbrella policy is for liability protection. Essentially protection from lawsuits. Proximity to the coast won't factor in at all.

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Denver McClurePro Member
Financial Advisor · Flower Mound, TX · Member since 2018 · 661 posts · 480 votes
1y
A smaller $1M Umbrella should work fine, just depends on the value. @Stanley J Black should be able to help.
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Owen RosenBusiness Member
Professional · Clinton Township, MI · Member since 2015 · 732 posts · 272 votes
1y
Quote from @Jared Martz:

Hey BP, I have a smaller portfolio of long term rentals and I am looking for some protection advice. I’ve been advised to look into an umbrella policy. Any of you out there have experience or advice on an avenue to pursue. I have a single family home and a quad unit in coastal Carolina. Both properties are in close proximity to the ocean. Thanks in advance, still a fairly new investor and can use all the knowledge available.

Just for clarity an umbrella policy is for liability protection. Essentially protection from lawsuits. Proximity to the coast won't factor in at all.
Royal Oath Insurance Group4.9211 Reviews
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- Jared Martz
  OP
  Rental Property Investor · Myrtle Beach · Member since 2019 · 38 posts · 25 votes
  1y
  @Owen Rosen I understand that, I am looking for liability protection.
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Jared Townsend
Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes
1y
You could get an umbrella that provides additional coverage beyond your landlord policy, or you could remove liability from the landlord policy and get a commercial general liability policy. Its worth running both ways to see what is more advantageous and affordable.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
@Jared Martz Umbrella coverage is additional GL coverage. Meaning it will step in only if you exhaust your primary GL coverage. As a property owner, if you exhaust your primary GL coverage, there was likely a severe premises liability claim that occurred at your property. Obtaining umbrella coverage is fine, but focus on identifying potential premises liability pitfalls at your properties and proactively eliminate them. Even if that liability event is a covered event, expect a ton of your time spent dealing with the litigation, your insurance premiums will increase (likely forcing you into surplus line coverage), you will be explaining the claim history to lenders and overall you will be viewed as a higher risk investor to work with. Asset protection begins with proactively identifying the most likely risks associated with operating your real estate business and operating your business in a manner that will reduce the likelihood of those events occurring.
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- Jared Martz
  OP
  Rental Property Investor · Myrtle Beach · Member since 2019 · 38 posts · 25 votes
  1y
  @Stuart Udis thank you! Makes a lot of sense.
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