I'm currently receiving quotes to insure a rental property owned by my LLC.

Due to the LLC, I'm being quoted as a commercial policyholder, although the home is a single-family residency.

Is there any method to avoid these high insurance cost and maintain the LLC ownership? Could I use myself as the policyholder since the LLC is a one-member entity?

Perhaps you want to shop around different insurance companies. I have two rentals in an LLC and am not considered a commercial policyholder by my insurance provider, USAA.

Originally posted by @April Benard :

I'm currently receiving quotes to insure a rental property owned by my LLC.

Due to the LLC, I'm being quoted as a commercial policyholder, although the home is a single-family residency.

Is there any method to avoid these high insurance cost and maintain the LLC ownership? Could I use myself as the policyholder since the LLC is a one-member entity?

Hi April, great question. You will need to check with the company your want to work with, but yes you can do that. We write them as personal lines policies in your personal name. We then add the LLC on the dec. pages and as an additional insured. If a claim is made, the check comes in your personal name and possibly the LLC as a second signer. I just wrote 2 policies in this way last week. The personal lines policies were about 1/3rd the cost of the commercial policies. My underwriter had no issues with this, they actually suggested it.

Thanks for the input! 

@Kevin R. I was able to call a local insurance agent and they were in favt able to offer your suggested policy! 

That is horrible blanket advice. Never place the named insured (the name on the top of the policy) in any other name than that which owns the property.

Kevin R. , you are fine because you contacted underwriting and hopefully received an underwriting memo underlining that they expect coverage to pay out for property and liability even if the LLC is the sole named party in the lawsuit, but as many do not have the ability to contact underwriters directly, they cannot do the same.

The issue is if the attorney only sues the owner of the property an additional insured endorsement alone will not cause the policy to recognize a claim. To the same an adjuster on a property claim could rightfully assert that the named insured had no insurable interest in the property (did not directly own the property) and deny the claim.

Be careful. Also find a great independent agent we have options way beyond 1 or 2 companies and can make a policy be what it should be, not squeeze around ownership issues. If you do go the route described above, ask your agent for the underwriting memo stating they intend to cover the LLC for property and liability claims just as if it were the named insured. Once you have that letter store it every way possible and make sure you have a good attorney, because the standard policy will give the adjuster many ways to deny your claims.

Or just do it right. I guarantee there is an underwriter that will get close to your price and write it the right way.

Have you tried State Farm and Allstate? I believe they insure properties under LLCs as non-commercial insurance.

@April Benard  

Go Astros!

It may be a little trickier to find carriers that will allow an LLC ownership, but it's definitely possible without going to a commercial policy! I have a couple I've used in Houston specifically lately!

@Jacob Passmore thanks for the info. I already have the homes insured but for future rentals I will definitely need a quote.  Would you be able to insure outside of Houston (Beaumont, Port Arthur, Orange area (mainly Beaumont)?

I have an investor friendly agent.  Contact me.

@Account Closed , I am in sugarland looking to move all my rentals into an LLC and will need to switch insurance from my personal name into my LLC. Can you please help refer me to an insurance agent who can help?

Thanks in advance.

Thu