Insurance Protection & Policies

6 Replies

I am reviewing my current insurance and was potentially looking at switching policies (to a better policy which covers more). I was wondering if there were any recommendations on things to make sure are included in my policy?

Also, what is everyone's recommendation/viewpoint on an umbrella policy? Anything to keep an eye on or make sure is included in this?

Just want to make sure I'm properly covered up front. Thanks in advance!

Have a discussion with the agent on whether you have RCV or ACV coverage on the dwelling. RCV aka replacement cost is way better coverage but will cost more.

If you are handy or have a good local contractor maybe consider upping the deductible? Ask the agent to walk you thru some what if scenarios to figure out what deductible you are comfortable with.

Then consider maxing out the available liability on the policy before considering the umbrella. Most companies offer $1 million and some are starting to offer up to $2 million for primary liability.

Along the lines of liability ask about personal injury coverage - getting sued for wrongful eviction or for declining to rent to someone because of discriminatory reasons.

Loss of Rent coverage - if property is damaged and tenants move out you lose the rental income while repairs are being made. This coverage kicks in to cover the lost rent.

Those are the big ones off the top of my head

@Benjamin Seibert I have a few things for you

  • I always recommend to my clients (I'm an insurance broker) to get a DP3 policy.  This policy is your most broad coverage option
  • Definitely look into these coverage's - personal injury, loss of rents (account for a full year's worth of rental income), water damage, a good amount of liability (at least 300k)
  • For any investor I work with who has one property or more, I recommend an umbrella 100% to help further protect you

I always recommend working with a broker versus a "big carrier" (st farm, allstate, usaa, farmers)

Is your broker guiding your renewal process or are you dealing with carriers directly?

Please message me directly if you would like any guidance on your renewal process.

@Matt Moylan thank you! That definitely helps. I have $1 million in liability and $30k in rental income.

I don't currently have an umbrella policy. How does the umbrella policy work/would I need one since I have a substantial amount in liability?

Thank you

@Benjamin Seibert Great questions.  I always recommend an umbrella because of the inexpensive annual cost associated with the policy.  It's even more important for investors because there are more assets and potential ways to get sued. 

In regards to how it works: your "underlying liability limits" (auto, home, rental property) usually have a base requirement of coverage needed to qualify for the policy.  If a claim were to be made, your underlying policy (auto/home/rental) liability would pay first, then if the amount exceeds what that policy can provide your umbrella kicks in at that point.  The umbrella works as a "stacking" or "additional" coverage.  Ex: home liability = 500k and umbrella = 1M -- your total limit of liability would be up to $1.5M.

If you have any additional questions or would like further guidance, feel free to message me directly