Liability insurance recommendation for the investment property

Charlotte, North Carolina
Insurance
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Liability insurance recommendation for the investment property

Shak F.
Investor · Charlotte, NC · Member since 2024 · 35 posts · 19 votes

Hello BPs, 

I am in process of closing an investment property. The lender is looking for proof of insurance/insurance. Is there any recommendations how much liability should I keep?


I am new to the investment and BP. Any advice would be greatly appreciated. 


Thank you,

Shak 

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  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    2y

    500/500 with an umbrella on top if you’re worth $1million or more. 

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  • Shak F.
    OP
    Investor · Charlotte, NC · Member since 2024 · 35 posts · 19 votes
    2y
    Quote from @Bill B.:

    500/500 with an umbrella on top if you’re worth $1million or more. 


     Thank you 

    1Reply
  • Owen RosenBusiness Member
    Professional · Clinton Township, MI · Member since 2015 · 678 posts · 259 votes
    2y
    Quote from @Shak F.:

    Hello BPs, 

    I am in process of closing an investment property. The lender is looking for proof of insurance/insurance. Is there any recommendations how much liability should I keep?


    I am new to the investment and BP. Any advice would be greatly appreciated. 


    Thank you,

    Shak 


     Have you spoken to your agent about it?

    Royal Oath Insurance Group4.9203 Reviews
    WebsiteView Page
    0Reply
  • John Mocker
    Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
    2y

    Shak,

    If this is a 1-4 family rental you have a couple of options for coverage:

    1. Personal Lines:  A Dwelling Fire policy is the most common way to cover the property.  Limits include: 

         a. Building (look for Replacment Cost coverage and Special Perils)

         b. Loss of Rents:  Most policies will include a percentage of the building limit for loss of Rents.  If that limit is not enough you should increase it

         c. Contents:  most policies will not include contents or a small limit.  Go over the things you own with in the building (ie. removable appliances, lawn mower, etc.) to see what limit you need.  Again, look for Replacment Cost coverage and Special Perils.

        d. Detached structures (garage, shed, etc.) Most policies will include a percentage of the building limit for detached structures. If that limit is not enough you should increase it

        e.  Liability:   purchase the maximum available and have them quote an umbrella above that if needed.

    2. Commercial Lines:  Two types of policies are common:

         a. business owners policy

         b. package policy

    Discuss the commercial policies with your agent to see if there is any advantage to those for your situation.  Generally the pricing is higher.



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  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    2y

    @Shak F.- ask your lender what  amount of insurance is  required 

    0Reply
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