Umbrella Insurance in CA

[Alan Pickering]

Do you have to have different umbrella insurance policies for different categories? Or is there an insurance company that will do one umbrella and cover it all?

For example:

I have one umbrella for my house, autos and 1-4 unit rental properties

I have another umbrella for a 8 unit apartment building, held in my LLC

Now my agent says I need another umbrella for a old hotel I purchased in self directed IRA. This is being rented to a single tenant who is running it as an independent living group home.

Thanks

[Eric Belgau]

There's a difference between a commercial umbrella and a personal umbrella. You'd need a different one for property owned by you and property owned by your LLC. If the hotel is held differently, it would need to be covered differently.

If there's a way to move it into your LLC, you might be able to save money by insuring the apartment and hotel together.

Otherwise, given the hotel property's use, I think you could protect yourself adequately with a lessor's risk policy that has high liability limits. You're probably being quoted a $2 million aggregate/$1 million occurrence limit, but there are $4 million aggregate/$2 million occurrence limits available. The higher limits should be cheaper than adding an umbrella.

An umbrella contains additional breadth of coverage, but most direct liability on the premises would hit your tenant's insurance first.

This is, of course, an opinion without knowledge of your actual situation.