Denton, TX · Member since 2013 · 25 posts · 3 votes
Hi! We have 9 rental properties in the Dallas Texas area. And are thinking about getting an umbrella policy on top of our insurance. Do you find that this is a good idea and if so what is a good company to use?
Also one of our houses is a trailer and the insurance I have been quoted is about 4 times more than our other houses. Is there a company out there who insures trailers at a reasonable price?
I was wondering if anyone had any insight into these two questions.
Thank you!
Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes
13y
USLI and AAIC (personalumbrella.com) will write an umbrella over up to 30 units. Most independent agents have access to these two carriers. Direct writers (State Farm, Farmers, Nationwide, Liberty Mutual, Allstate, etc) are typically not the best option for real estate investors. They force you to fit their underwriting guidelines as opposed to structuring the best combination of policies for you.
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
13y
I have an umbrella policy and highly recommend it. It's cheap insurance. I pay $180 for a million dollars worth of coverage.
As for who to go with, check with your current insurance provider. Many insurance companies will require you to have your home and auto policies with them in order to get an umbrella policy.
Investor · Sunnyvale, CA · Member since 2013 · 62 posts · 19 votes
13y
With 9 rentals I would certainly recommend getting an umbrella policy especially if you don't have them under an LLC. It's very cheap relative to the coverage. I have a $2M policy and it's around $600 which may be high but still worth it. I went with Geico since my other policies are with them and they sell a policy through Travelers. There might be some limitations on the number of rental properties which can be covered under a personal policy as opposed to a commercial/business policy. I was told it was four properties plus my personal home(s).
SFR Investor · Watkinsville, GA · Member since 2011 · 83 posts · 33 votes
13y
I'm with Nationwide and although I maxed out their own five house rule, my umbrella extends to all properties I own. Like others mine is also 1MM and runs just over $200/year so prices can vary spending on who and where. But yes, defiantly cheap insurance in the event you are sued. FWIW, I only have my umbrella, no LLC.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
No idea on trailers but I have an umbrella policy on my properties and I think it's worth every penny. It's incredibly cheap, like $20/month, and enough coverage to protect you from any raunchy lawsuits. I go through USAA for all my insurance, but you have to have military affiliation to use them. If you do, I highly recommend them.
Investor · Kansas City, MO · Member since 2008 · 153 posts · 81 votes
13y
It is really not an issue of "either/or" as an umbrella and an LLC are/could be created for different reasons. Think of the LLC and other work you may do with legal and financial advisers (such as attorneys and accountants) as your "castle walls and moat" around your assets, personal and otherwise. Think of the insurance you secure as an "archer in the watchtower". In other words, the walls and moat should be your foundation as it pertains to protecting you/your assets. The archer (insurance) won't pick off every bad guy that tries to get in, so having the walls and moat is vital. Think of them working together not in lieu of each other. Hopefully this helps!
Flipper/Rehabber · Indy · Member since 2013 · 22 posts · 10 votes
13y
I also have an umbrella policy to protect me in the event of an unlikely incident. As everyone has said, you get a lot of bang for your buck. I pay $350/year and my policy was written through USAA. One thing I didn't see mentioned was that, as a requirement on your umbrella policy, you generally have to carry higher liability coverage on everything else (homeowners, auto). So this adds to the expense a little as those premiums will go up.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
13y
I still don't see the value of the umbrella policy.
If you already have insurance on a home and the lawsuit goes
above that liability amount, then the umbrella policy kicks in and pays off the remaining amount. Is that correct?
But whats to stop the lawsuit from going over and above the umbrella policy too? Thats the part I struggle with.
Or are you saying that the umbrella policy is going to exclude one million dollars of my assets in a lawsuit? So if they win 5 million dollars, my rental property insurance pays the max amount. And then the tenant could go after all my other stuff. But once they're done, the insurance company would give me a million dollars? Or likely would pay a million of that in cash to the plaintiff but let me keep a million dollars of worth in my homes?
Involved In Real Estate · Potomac Falls, VA · Member since 2012 · 203 posts · 31 votes
13y
The last time I called USAA when I was closing on an investment they asked me about the Umbrella policy to see if I was ready to purchase. Of course, being as literal as I am, I told them the weather was fine and I didn't expect to need an umbrella until mid November.
That being said, could someone please explain the purpose of these Umbrella Policies?
With 9 rentals I would certainly recommend getting an umbrella policy especially if you don't have them under an LLC. It's very cheap relative to the coverage. I have a $2M policy and it's around $600 which may be high but still worth it. I went with Geico since my other policies are with them and they sell a policy through Travelers. There might be some limitations on the number of rental properties which can be covered under a personal policy as opposed to a commercial/business policy. I was told it was four properties plus my personal home(s).
I have Safeco now for my umbrella and my agent told me they will do up to 16 houses under it. I think Traveller's (which I used to have) would only do up to 4.
Real Estate Broker · Johns Creek, GA · Member since 2009 · 870 posts · 664 votes
13y
I am having issues with my umbrella as well. Allstate only allows 4 rentals and will not make exception for a 5. I have my 5th landlord policy with State Farm . Does it make sense to have an umbrella with both Allstate and State Farm?
One legal counsel told me that a $2M umbrella is all that needed and an LLC is not necessary.
How many of you just have an umbrella without LLCs? Do you agree me with what my legal counsel is saying?
I am having issues with my umbrella as well. Allstate only allows 4 rentals and will not make exception for a 5. I have my 5th landlord policy with State Farm . Does it make sense to have an umbrella with both Allstate and State Farm?
One legal counsel told me that a $2M umbrella is all that needed and an LLC is not necessary.
How many of you just have an umbrella without LLCs? Do you agree me with what my legal counsel is saying?
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I'm not sure if another carrier will write an additional umbrella if you already have one with a different carrier. Your car and personal residence need to be under the umbrella and I don't see how that would work with two separate umbrellas?
I'm surprised your attorney gave you that advice. The lawyers I've dealt with have told me that the goal should be to have all properties under LLCs. However if you browse through any property appraiser's website you can see that most small landlords don't do this in the real world.
Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes
13y
USLI and AAIC (personalumbrella.com) will write an umbrella over up to 30 units. Most independent agents have access to these two carriers. Direct writers (State Farm, Farmers, Nationwide, Liberty Mutual, Allstate, etc) are typically not the best option for real estate investors. They force you to fit their underwriting guidelines as opposed to structuring the best combination of policies for you.
SFR Investor · Friendswood, TX · Member since 2013 · 136 posts · 11 votes
13y
I agree look to go with independent company. As the big box ones like all state have limitations etc... When it comes to investment policies.
And yes it's good to have an umbrella policy.
USLI and AAIC (personalumbrella.com) will write an umbrella over up to 30 units. Most independent agents have access to these two carriers. Direct writers (State Farm, Farmers, Nationwide, Liberty Mutual, Allstate, etc) are typically not the best option for real estate investors. They force you to fit their underwriting guidelines as opposed to structuring the best combination of policies for you.
Hi, Joe.
Thanks for the great advice. I looked at the website for both USLI http://www.usli.com/personal-lines.html
I'm going to check both out. Is it cheaper to deal with these companies directly vs. using a local agent to find an umbrella policy that works for investors with more than 4 properties?
Investor · Columbus, OH · Member since 2014 · 124 posts · 67 votes
11y
James Park, we were told similar information and do not have an LLC, only umbrella. We were told LLC is worthless in our situation since we do our management and most repairs ourselves, making the LLC easily pierced.
I found out Geico will only insure up to five units (not properties). Good to know. Seems like I need to find a specialized provider.
I don;t know about Geico, but some carriers (State Farm for example) make a distinction between "personal" and "commercial" umbrella. They will have a limit on the number of properties you can cover with "personal" umbrella - Sate Farm limit's at 5, if I recall. After that you will have to take out a "commercial" umbrella, which, as you may have guessed is a bit more expensive. Still not excessive, but it IS more expensive than "personal".