I had 4 rental units until 2 weeks ago. I recently purchased a triplex, bringing me up to 7 units. My insurance agent called me today to tell me that my personal umbrella policy covers up to 4 units, and that now that I have 7 units, it won't cover any of them. Since it's no longer covering any rentals, the premium goes down by like $32, and still covers me personally. I'll keep the personal umbrella, and my agent said I can get a commercial umbrella policy to cover the rentals now (at ~$350 a year or something like that), but he also said it might not be necessary, since each property has coverage for $1 million per occurrence and $2 million per year. It obviously depends on my comfort level and risk tolerance.
I'm pretty comfortable with the coverage of the current property policies, but I've never had any claims against me or my properties, so I don't know if $1,000,000 is plenty of coverage or not. Would you suggest getting the commercial umbrella policy? And would you still hold on to the personal umbrella?
@Chris Sweeney it all comes down to your risk tolerance.
To put the risk into perspective, with a SFR, the tenenat would have to come up with a single $1M claim, while the 3 unit could have 3 tenants sue you for $333,333 before you exceed the $1M general liability policy.
If you purchase a commercial umbrella, you would remove those rentals off of your personal policy. But, there are personal umbrellas out there that would go over your home, auto and 7 units for $350-$400 per year.
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