Lets say your purchasing a 250k home in CT multifamily 3 or 4 units owner occupied. How much property insurance/ liability do I need? I dont want to over pay but by no means do I want to be cheap. Should I also get an umbrella policy even though my home owners insurance has liability?
Thanks in Advance
The insurance agent I used got the umbrella insurance to simplify things and also make it cheaper.
I originally got insurance for my cars, then insurance for my home, later on insurance for my rentals. Each one has coverage of 1MM to 2MM. What she did was to get an umbrella that covers my auto, home, rentals, reduced the liability coverage to $500,000 on each, and have the umbrella cover any liability above and beyond them. Not only did the package deal came out cheaper, but as I add rentals, I can increase the coverage of the umbrella, without having to go back to change the coverage of the others. The reason is as you get more assets, lawyers will come after you for larger amounts, and the coverage on the umbrella is not that much for an incremental million.
As an example, I originally had $1MM liability for each auto, then $1MM for my home. So they're reduced to $500K, but has the umbrella covering anything above it. The first umbrella done this way was $2MM, but as rentals are added over time, it gone up to $4MM, $5MM, and she didn't think I need more than that. Says the insurance company will fight hard if sued for $5MM.
As far as I know, when I got into active businesses in LLC's, S Corps, they are not covered by the umbrella but stands on it's own with their own liability. However, you should use agents savvy in the ways of business and insurance.