Umbrella Policy Issue

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Umbrella Policy Issue

Marc S.
New to Real Estate · NY · Member since 2015 · 119 posts · 36 votes

Afternoon BP, 

I fear that I know the answer to my issue but want to get the advice of someone who is an expert in the Insurance game. The exciting part is that I am a first-time investor and am in the process of closing on my first ever investment property. I am currently living in NY and am in the option period on a SFH in Texas that will be used as a rental property Investment, that's the good news.

From what I've learned and researched, it is "standard" and smart that I should have an umbrella policy to cover myself for any liability issues that come along with owing a property with renters, here lies the start of my problem. Currently I am living with my in-laws.  What I suddenly found out today after attempting to get an umbrella quote is that I cannot get an umbrella policy if I currently do not have homeowners or renters' insurance.  Something that may seem like I should have known but am learning about now. The reason I don't have either is that my wife and I are currently house hunting for our own home here in NY and in the meantime, we were fortunate enough that my in-laws are allowing us to stay with them till we do find a home. 

My issue now is that I cannot get a quote or a policy. If there is someone out there with the knowledge or can provide advice on how to or if there is even a way to work around this, I would appreciate any and all feedback.  

One of the ideas I did have was that currently my mother lives in NY as well and has an apartment that she has renters' insurance on. Would I be able to add myself to that policy which would then allow me to get the umbrella? 

Appreciate any help as I don't want this to derail my first RE investment purchase. 

Thank you! 
 

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Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
2y

@Marc S.  Get an umbrella policy quote from the person who wrote you landlord policy is the simpliest thing to do. Use an independent insurance agent to get a quote. 

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  • Les Jean-Pierre
    Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    2y

    My family has a rental property in NYC and had a regular insurance policy and also an umbrella policy from the same underwriter. My parents had an umbrella policy through their homeowner's policy for a while. Doing the math, it was cheaper to do the umbrella with the underwriter who wrote the policy for the building. I note my parents live in NY as well.

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  • Marc S.
    OP
    New to Real Estate · NY · Member since 2015 · 119 posts · 36 votes
    2y
    Quote from @Colleen F.:

    @Marc S.   What is your legal address?  The thing to do is whatever is your legal address is that is your address for insurance. If it is your MIL's place are you renting from them? or just staying. My homeowners insurance says I can't have more than two renters and some policies you can get a rider on insurance for renters. Someone can help them look at their policy to see what the restrictions are.  If it outright says they can have renters you don't have to call and ask. Otherwise you could have them call and say hey the kids moved in and they want a renters policy, is it a problem if they get a policy on their own. 

    @Colleen F..  Thank you for the advice. Let's play what if and take the scenario that my in laws policy does not allow for renters, just a what if.  Then what are my options?? Due to the dynamics of everything with them, asking them to be added to their policy is absolutely not an option.   

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  • Marc S.
    OP
    New to Real Estate · NY · Member since 2015 · 119 posts · 36 votes
    2y
    Quote from @Colleen F.:

    @Marc S.   What is your legal address?  The thing to do is whatever is your legal address is that is your address for insurance. If it is your MIL's place are you renting from them? or just staying. My homeowners insurance says I can't have more than two renters and some policies you can get a rider on insurance for renters. Someone can help them look at their policy to see what the restrictions are.  If it outright says they can have renters you don't have to call and ask. Otherwise you could have them call and say hey the kids moved in and they want a renters policy, is it a problem if they get a policy on their own. 

    @Colleen F.. I was always under the assumption that I would be able to get an umbrella policy off of my landlord insurance of the investment in property in TX even though I live in NY.  

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  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 676 posts · 259 votes
    2y
    Quote from @Marc S.:

    Unless someone can correct this, ultimately, I would need to get a renters policy while living with my in-laws.  I was also told that in other states, there are certain renters' policies that do not allow for "renters" in their homeowners insurance policy. 

    So, what I need to do now is find out if my in-laws homeowners' policy (Here in NY) allows for renters, if it does, I have to get a basic renters policy for me and then I can get the umbrella. The major issue is if my in-law's policy does not allow for renters, I am really f-ucked. The other issue is my wife, and I are trying to not involve my in-laws (her parents) in our business.  

    If any is from NY and can confirm this, please let me know.  

    This should be quite simple.  All you need to do is get a renters insurance policy and then an umbrella policy as others have indicated.  The part about your in-laws homeowners insurance isn't really relevant.  They've already allowed you to stay at their house.  If they have issues with their homeowners insurance it won't have anything to do with you trying to purchase your own renters insurance for your own personal liability.

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  • John Clark
    Member since 2018 · 1k+ posts · 1k+ votes
    2y
    Quote from @Marc S.:

    Afternoon BP, 

    I fear that I know the answer to my issue but want to get the advice of someone who is an expert in the Insurance game. The exciting part is that I am a first-time investor and am in the process of closing on my first ever investment property. I am currently living in NY and am in the option period on a SFH in Texas that will be used as a rental property Investment, that's the good news.

    From what I've learned and researched, it is "standard" and smart that I should have an umbrella policy to cover myself for any liability issues that come along with owing a property with renters, here lies the start of my problem. Currently I am living with my in-laws.  What I suddenly found out today after attempting to get an umbrella quote is that I cannot get an umbrella policy if I currently do not have homeowners or renters' insurance.  Something that may seem like I should have known but am learning about now. The reason I don't have either is that my wife and I are currently house hunting for our own home here in NY and in the meantime, we were fortunate enough that my in-laws are allowing us to stay with them till we do find a home. 

    My issue now is that I cannot get a quote or a policy. If there is someone out there with the knowledge or can provide advice on how to or if there is even a way to work around this, I would appreciate any and all feedback.  

    One of the ideas I did have was that currently my mother lives in NY as well and has an apartment that she has renters' insurance on. Would I be able to add myself to that policy which would then allow me to get the umbrella? 

    Appreciate any help as I don't want this to derail my first RE investment purchase. 

    Thank you! 
     

    Keep in mind that most umbrella policies do not cover business pursuits. Make sure your umbrella policy includes a rider covering your business pursuits. 
    0Reply
  • John Clark
    Member since 2018 · 1k+ posts · 1k+ votes
    2y
    Quote from @Marc S.:

    Afternoon BP, 

    I fear that I know the answer to my issue but want to get the advice of someone who is an expert in the Insurance game. The exciting part is that I am a first-time investor and am in the process of closing on my first ever investment property. I am currently living in NY and am in the option period on a SFH in Texas that will be used as a rental property Investment, that's the good news.

    From what I've learned and researched, it is "standard" and smart that I should have an umbrella policy to cover myself for any liability issues that come along with owing a property with renters, here lies the start of my problem. Currently I am living with my in-laws.  What I suddenly found out today after attempting to get an umbrella quote is that I cannot get an umbrella policy if I currently do not have homeowners or renters' insurance.  Something that may seem like I should have known but am learning about now. The reason I don't have either is that my wife and I are currently house hunting for our own home here in NY and in the meantime, we were fortunate enough that my in-laws are allowing us to stay with them till we do find a home. 

    My issue now is that I cannot get a quote or a policy. If there is someone out there with the knowledge or can provide advice on how to or if there is even a way to work around this, I would appreciate any and all feedback.  

    One of the ideas I did have was that currently my mother lives in NY as well and has an apartment that she has renters' insurance on. Would I be able to add myself to that policy which would then allow me to get the umbrella? 

    Appreciate any help as I don't want this to derail my first RE investment purchase. 

    Thank you! 
     

    Keep in mind that most umbrella policies do not cover business pursuits. Make sure your umbrella policy includes a rider covering your business pursuits. 
    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    2y

    @Marc S. so if their policy doesn't cover renters and they are renting to you, they would have an issue. If you are just staying with them not so much. But if you don't want to ask just get the renters policy at your legal address and an umbrella or I almost think the best answer now is to just get a big liability on the base policy for the rental, like a million.  You can go to an umbrella later when you buy your own house. It sounds like you would want to be moving soon anyway.   

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  • Marc S.
    OP
    New to Real Estate · NY · Member since 2015 · 119 posts · 36 votes
    2y

    Thank you everyone for all your advice, suggestions, and offers to provide assistance. I was able to secure a 1-million-dollar policy under RLI with just my auto insurance and did not have to get a renters or homeowners policy. On the advice of some RE investor friends, I upped my landlord policy in TX from 500k to 1 mil as well, it was only an extra $4! No brainer for a peach of mind.

    Crisis averted and I'm on my way to owning my 1st property.  

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