Umbrella policies for buy & hold

18 Replies

Because of numerous lender issues with LLCs, I've decided I want to try and protect my assets with an umbrella policy, for at least the present.  I've read several threads on BP on this topic, and I'm still hitting the proverbial "brick wall":  finding a company that will sell me an umbrella policy that will cover all my assets, i.e. my primary residence, vehicles and several small multi-family policies all titled in my personal name.

Here is whom I've called so far (based on recommendations I found on previous threads), to no avail:

AAIC  – NO

Safeco - must write all property insurance/vehicle policies to provide (don't want to do this)

Progressive  – NO

Allstate  – NO

GEICO – NO

USLI - gave me a local agent and "is going to get back to me", but sounded like they wouldn't

I'm sure someone out there has such a policy.  Who is your carrier?

Thanks in advance!

@Wesley W. dont you have a local insurance agency you can call with access to multiple insurance products? It may be likely that you need more than one policy. 

@Wesley W.

I have several policies, but one agent who manages them all.  I've never heard of one company that offers it all under one policy. I'm sure if this is a thing though, someone on BP knows about it! 

Umbrella policies do not cover what you're asking about. They are a specific type of catastrophic policy that "umbrellas over" your other policies and kick in if something happens that exceeds your other policy limits.

just so you don't feel alone, I'm working through the same thing.  I have properties in 2 states, and tenants with a dog.  There are all kinds of little things that different companies are picky about.  Good luck!

We have All State for our umbrella policy, but I did have to switch my home owner's and auto insurance over to them, and my 3 multi family properties are with them as well.  I am not sure about other companies since we had to go with All State- no other company would insure my rentals since we might rent to college students....

@Rob Beland I've called several local brokers, but I didn't list them because no one outside my area will have heard of them.

@Lynn Currie To clarify, I have separate insurance policies on these assets (up to $300K), but I'm looking for a policy to cover our liability beyond these limits.

I'm assuming one umbrella policy could be written, with the premium determined by the number/type of assets that might incur a liability claim.

@Wesley W. its been my experience that umbrella insurance is needed when your regular insurance provider wont offer enough coverage. I think an umbrella policy starts at $5M in coverage but I dont know from personal experience. It might be better to call your current provider and bump up your limits. I have three different policies for my six properties. The most recent property I purchased is a SFR with a dwelling fire policy and $2M liability. The whole policy costs $720/year. Have you tried to increase your liability limit?

If you are a former military member USAA offers umbrella policies of $1M, $2M, and $3M.  But regardless of who you go through, expect that the company issuing the umbrella will require you to have all of your policies under them (e.g. I have my renter's, auto, and fire policies all with USAA) this was a hard requirement to have them issue the umbrella.  I would expect all other companies to do the same.

@Wesley W.

 Like everyone else has mentioned, I use Safeco for my umbrella but had to adjust my own homeowners policy as well as both vehicles. For the low cost it was a no brainer for me. Maybe reconsider and go with Safeco.

We have our home, auto, and umbrellas (personal and commercial) with State Farm.

@Wesley W.

A lot of these responses are going to be different based on where everyone is located.  It was easy for me to raise my liability limits on my property in MD and it only cost me about $50/year in higher coverage to go from $300k to $1 million.  

My other properties are in Florida which made it much more difficult. I couldn't increase my coverage there past $300k so I used the broker I use for my homeowners insurance.  The company I used for my umbrella policy is RLI insurance company.  At $1 million in coverage and 4 rental houses, no boat, no RV, no jet skis, 2 cars, 2 drivers, no young drivers, no old drivers, etc., and without uninsured motorist my premium is $296 per year and $2 million in coverage would put me at $533/year. 

I hope that helps but it is certainly based on location and carriers.  Don't listen to the "you need every insurance policy under one carrier or it starts at $5 million".  What I found when I was shopping rates was some of the bigger companies will require you to use them for all your policies.  However, there are companies who specialize in this type of insurance, keep looking for those guys.  I hope this helps, good luck.

William Allen, Real Estate Agent in FL (#SL3330247)
850-483-1761

I am actually a national insurance agent and write personal lines insurance in almost all 50 states. You can get a stand alone umbrella through a company named personal umbrella. They are a little more expensive than if you bundled everything with a company like Allstate or safeco though. The nice thing is they allow up 30 rental properties to be covered and will go up to 10 million. Give me a call if you want me to take a look at your umbrella or any of your other insurance. Safeco will also allow you to do an umbrella as long as they have your auto insurance and will usually go up to about 16 units. Good luck!

Mike Roeder

612-215-3674

@Wesley W.   As a Real estate investor continues to grow, eventually they run into this issue.  99.9% chance you will not find a single insurance company who can do this at a competitive rate.  This is usually when investors find their way to an independent insurance broker to essentially take over the management of all your insurance policies.  This way you develop a relationship with 1 individual who spends the time quoting and blending all the coverage's into 1 cohesive program. 

Here are some basic guidelines to consider when trying to consolidate.

Personal "Umbrella" coverage is used to raise your liability limits beyond the point of the base policy on any asset in your personal name.  Example, if you have a home or auto with $300k of liability, the Umbrella policy will pickup @ $300,001 and extend up to a $1,000,000 or an additional $1,000,000 for a total of $1,300,000. 

Most personal umbrella will have a threshold for # or rental units, usually 4-10 total units.  To make it more difficult, they may limit those buildings to nothing bigger than a 4 unit.  Beyond the 4-10, they consider your rental portfolio to be commercial. 

Commercial Umbrellas start @ $1,000,000 and can go over the top of multiple different insurance carriers as long as they met the financial stability guidelines of the Umbrella company.  I have on client who we are writing the Umbrella over the top of 4 Farmers policies in IL, 1 State Farm in WI, 1 Auto Owners IL, and a Lloyds of London policy in FL.  I only represent 2 of the 4 companies. 

Hope this helps you. 

I purchased a Personal Premisses Liability (PPL) policy one for each of my 4 rental properties for $50.00 per property per year for $500,000 of liability coverage for each property and I also purchased an Umbrella Policy for $1 Million for $283.00 per year. All purchased from State Farm Insurance. The Umbrella Policy covers both my wife and myself.

@Rob Beland I didn't think raising my liability limits was practical, since it would involve no less than 9 discrete policy adjustments.  Just too much to keep track of.  Was looking for more simple solution.

@James Vega I've heard all sorts of great things about USAA.  Unfortunately, having no military affiliation, I don't qualify for a policy.

@Kirill Chervets I was trying to avoid placing "all my eggs in one insurer's basket."  I had a very bad experience with an insurer bait-and-switching the policy premium after I cancelled my old company but within their regulated 30-day period after the onset of coverage.  Having a distrust of the entire industry is an understatement, and I'd rather not give any one entity that much control if I can avoid it.

Thanks to everyone for your thoughtful input.  I've written down a few more companies to vet.

AAIC should have no problem insuring it if you go through the right agent.  As other agents suggested they will write up to 30 habitational units.  If you were above that, then the big dogs will kick in and do the umbrella, Market, AIG, Chubb, etc.  

If you need help with your pursuit, my contact info is below.

@Wesley W. go with Farmers! they will write one umbrella policy (with the limits you chose $1, 2, 3  millions, and this will act like a shield between your assetts and everyone else trying to get to them. This wil protect your autos, properties and ultimately yourself! if someone tries to sue you for example first the liability coverage on whatever covered item auto or home will kick in then if those limits are not enough the umbrella will serve as a second layer of protection for you, happy to answer any other questions you can think of, thanks.

As has been said here, Umbrella is to cover if your current underlying limits are not enough. Umbrellas are usually tied to the active Auto policy on the account and require you have liability limits of at least 250/500. The umbrella would cover any property and vehicles you are liable for. That is probably why you are running into situations like Safeco wanting you to have all your policies in one place. 

I always recommend finding an independent agent that works in your area to take care of and shop the rates and options for you. Dave Ramsey ELPs are usually the best, but I am a little biased on that. haha. Reason is knowing there is contractual agreements on them to take care of you and your personal financial goals. (If you like Dave or not doesn't matter, you just know you are getting a trusted agent that will work for you and serve your goals and needs while offering unbiased expert advice in their field.)

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