Does this sound right? (Advice on first umbrella policy)

Question

Chris Eaker · Answer

Michael A.

No we do not have any other policies with USLI. I bought it through Esurance.com. Just shop around to get the best price.

Chris Eaker · Answer

Michael A. It's supposed to. But you got me thinking and I checked my policy. It says it covers 2 "residences" and do include rentals in their definition of residences. I bought that policy back when we did only have my primary and one rental house, so I need to call them and add the others. I am not sure how that will affect my premium. Thanks for bringing that to my attention!

Chris Eaker · Answer

Michael A.

I also have an umbrella policy. I think it's a very smart policy to have. I have 5 rental units. My policy states that all my other policies (the underlying insurance) has to have a minimum of $300k liability, so that's all I get on those policies. My umbrella policy is through United States Liability Insurance Group and I pay $203/yr for $1M coverage.

Angela Henderson · Answer

This is an excellent thread.... I have 2 rentals and have 1 million liability on each policy. We're now searching for our 3rd. No LLC. Why would I need an umbrella policy if each individual policy covers up to 1 million?

Tim Puffer · Answer

USLI is a good company with a good product. I would go with an independent agent as they will have a ton more options as far as insurance companies for you. Please don't go to an online company only for your insurance. You need to make sure you are properly covered and Esurance and the like only care about getting paid. Find a good agent who you can build a personal relationship with.

You should be able to have your liability at $1 Million on you rental property policy and then also have a $1 Million umbrella.

The benefit in having your rental policy and umbrella with the same company is that the policy language will be seamless and there wouldn't be any question as to who is going to cover a claim should one occur.

If you have your properties in an LLC, you will need to have a commercial umbrella and not a personal one.

Casey J Burkhead · Answer

Hi Norm,

I can confirm your landlord dwelling agent is correct and one of the few negatives of getting the umbrella from a company other than the one who handles your primary lines is the cost may be higher. Chris also points out another possible factor -  having lines of business with multiple agents could possibly leave you open to gaps in your coverage unless you're staying on top of it yourself. And yes State Farm should be able to write you an umbrella to cover everything including the rental. Just keep in mind that if you plan on purchasing more rentals down the road, most companies have a limit to the amount of units they will insure for one person.

--Casey