Can’t get umbrella insurance

[Thomas Beard]

I tried to get an umbrella policy added to my home owners insurance and was denied due to a recent claim. What other insurance options do I have to protect myself from liability? Can I get an independent umbrella policy through a different company? Or should I just see if I can increase my liability insurance coverage on my rental property policies? 

[Allan C.]

@Thomas Beard I know this diverges from the intent of your post, but I think there’s a valuable lesson for other investors to learn from your story.

My philosophy is to avoid making insurance claims unless absolutely necessary because the consequences are higher costs down the line. Whether it’s higher premiums, inferior coverage, or other, my experience suggest to not make a claim unless costs exceed $10k. This threshold will vary by investor and circumstances, but it’s a threshold everyone should define and prepare for.

This ultimately factors into your reserve assessment and your deductible selection. Carrying min deductibles as an investor doesn’t make sense, so don’t pay the extra premium for it.