Hi,

I own a property that is under my name and two other individuals. We plan to do long-term rentals on the property out for most of the time. We are concerned with personal liability on the property, say if someone is injured or (god-forbid) drowns in the pool. We would like to protect ourselves personally and our assets against litigation that may potentially occur. We also do not want to use an LLC to own the property because of potential opportunities for Short term rentals in the future (which requires owner-occupancy). What kind of insurance would you recommend we get to protect ourselves in this scenario?

Thanks!

 

Commercial and I recommend each one of you to get umbrella policy, they are inexpensive. But in order to get those your liability must be at min of 500k limits on auto, etc.  Just call a local  agency near you. 

Thank you @Nina Hayden . Could you clarify what you mean by commercial? The property is residential is owned by 3 individuals. If one of the individuals does not own a car, what type of min coverage does that person need to qualify for umbrella?

What I know to be the case for myself is the property has liability protection coverage as part of my standard landlord property policy. Umbrella covers the amount after the property liability coverage is exhausted in the even of a claim against liability. The insurance underwriter will require 500k on your landlord policy, then you get coverage by a separate personal umbrella policy.  Your insurance broker should be able to review the landlord policy and confirm you have the right coverage needed for an umbrella. You get umbrella to cover the amount of your total assets. I dont believe you can have a commercial policy and then use a personal umbrella policy. not sure if thats correct advice. hope that helps!

Thank you @Jeff Bridges . In my case, with a property under 3 names - would I need ONE standard landlord property policy and 3 umbrellas on top of that?

Originally posted by @Kevin Y. :

Thank you @Jeff Bridges. In my case, with a property under 3 names - would I need ONE standard landlord property policy and 3 umbrellas on top of that?

That sounds most likely to be true since they are personally owned but subject to verification from your insurance broker. seriously, look for an independent insurance broker. Costs nothing, shops many policies for you and not tied to a specific insurance product. worth their weight in gold! just ask around or google for independent brokers/companies for your area.

 

Yes, call insurance broker. They will guide you and it won’t cost anything.  

@Kevin Y. You want the following,

1)  All 3 owners should be listed as Named Insured on the policy if they are holding title to the property.

2)  The landlord policy can give you up to $1M in Liability limits

3)  If you want higher Liability limits, an Umbrella can add as much as you are comfortable with in $1M increments.

There is no exact Liability amount you need to carry, but more a comfort level for you and your partners.  If the property does have a pool, make sure you have all of the proper warning signs.

A Commercial Form or Personal Form policy should be able to do this for you.  

Thank you for the advice @Jason Bott . 

1. Does the LL policy give up to 1MM as a lump-sum in liability coverage to the 3 individuals?

2. For the umbrella you mentioned on top of that, would we need 3 umbrella policies to cover each of us?

3. Given this is 3 names rather than a company, would that automatically mean we should get this under personal?

Thanks!

@Kevin Y.

1. Does the LL policy give up to 1MM as a lump-sum in liability coverage to the 3 individuals?  No, it is the amount the insurance company will pay out in a claim settlement.

2. For the umbrella you mentioned on top of that, would we need 3 umbrella policies to cover each of us? No, only 1 over the rental, but each of you should have your own personal Umbrella so that a claim you have under your personal Home or Auto doesn't go after the rental.

3. Given this is 3 names rather than a company, would that automatically mean we should get this under personal?  No, it can be a either a Personal or Commercial Umbrella.