Umbrella Insurance - What to look for?

Question

Hello all,

Currently in contact with a broker who is shopping around for umbrella insurance for me - I don't have my properties in an LLC because i have limited equity in them right now and I've heard they don't actually give you the projection you need and there are ways to get into them if you get sued.  What should i be looking out for in order to get adequate umbrella insurance? Any mistakes or lessons anyone has learned?

$450 yearly premium for a 1m policy is what i have right now.

Harrison

Ganessan P. · Answer

@Harrison Sharp What do you mean "I don't have my properties in an LLC because i have limited equity in them right now" . Forgive me for my lack knowledge.

To my understanding, i believe you can put a property into an LLC with limited equity ( i assume lender holds majority of the equity ) through "Land Trust".

Before the creditor comes behind you, they will do the research and find out if you don't have equity anywhere, they would not come behind you. I am learning... looking forward to others to comment on this. Of course, i am not an "Asset Protection" Attorney. Forgive my if i have said anything wrong.

David M. · Answer

@Harrison Sharp

I believe the policies are generally the same.  Honestly, I just use the umbrella policy where I get all my other insurance.

Yes, LLC’s can sometime be over sold for asset protection.  Protecting and maintaining your corporate veil can be “nebulous” at times.  Also, they are more expensive to operate investments since you have to get commercial loans.

Good luck.

Christopher Smith · Answer

I'm paying about 350 for 1,000,000 coverage for several properties located in two states. I just checked to make sure that it would adequately cover me mostly for liability sourced from non-real estate activities (e.g., severe auto accident in which folks are killed). The standard liability insurance policies I have on the properties themselves are very likely adequate for liability sourced from the properties that they cover.

How risky are your other activities? I generally have a low risk personal lifestyle since I don't, drive too much, drink or drug and act a fool, make outrageous postings to social media, have wildly irresponsible minor children or engage in other inherently hazardous or extreme business or non-business activities (e.g., manufacture drugs or dynamite in my basement, etc.).