Real Estate Investor · Novato , CA · Member since 2016 · 24 posts · 2 votes
I am a new investor who will be doing the BRRRR strategy in Ohio.
I am in the process of creating an LLC.
I am told I should get property insurance, and an Umbrella policy....
Should I be getting a "personal umbrella policy", or should I be getting a business umbrella policy? If getting business, I assume I can't purchase until I get the property insurance, right? Thus I need to wait to buy my first property before buying any of the insurance..?
Also any recommendations on where to get these insurances from?
Umbrellas are good for company insurance, you will get a primary CGL policy which you can keep at a lower amount and thus a lower principle payment because the umbrella protects anything past that at a lower rate. 1.5 mil as all primary is typically more expensive than say .5 mil primary and 1 mil umbrella. I used one for my first company and am waiting on quotes for my newest company. I am not sure what will make it worth it for an investment portfolio in terms of the number of houses, if you put multiple properties under one company I am sure that it will be a valuable investment. Get quotes from all the major companies that have been around and will still be around when you need them to payout. You don't want to take the lowest quote from a company that makes its money by not paying out to its few customers. Also, I wouldn't be paying those principle payments until I had a property that needed the coverage.
@Andrew K. - You will need to get a renovation insurance policy on the home in the name of the LLC - depending on the company it may take the look of either a personal, or commercial policy. For the umbrella - prices generally aren't that high. You will want to make sure to find out if it is "following form" or not from your broker (they should know this - if not RUN). By following form this just means that the umbrella essentially adopts the primary policy provisions, thus possibly avoiding potential gaps in coverage from the primary to the umbrella.