How much umbrella insurance to get?

[Serge Suchkov]

Hello all, I have decided against moving my 2 properties into an LLC and instead will opt for umbrella insurance. I have often heard on the podcast that it is only a matter of time before a landlord gets hit with a lawsuit. So to all the people that have gotten sued, I have three questions:

What type of lawsuits have you seen (small frivolous, or large and potentially destructive)?

What did you do about them (hire a lawyer, settle, or let insurance cover it)?

And my main question is how much and what type of insurance coverage would you recommend?

Thanks for your help. 

[Frank Chin]

I own primarily 1,2, plexes, and when I was up to six in NYC, I carried 3 million in my umbrella. My insurance agent tells me, for that amount, the insurance company will fight long and hard if someone sues. 

So far, for my rentals, over 30 years,I had a slip and fall, and a negligence case. Both cases did not go to court. For the negligence case, paid the tenant $1,500, doesn't pay to file a claim for that amount, and screw up the insurance. In the slip and fall case, had the attorney get after the insurance company, then the litigant dropped the case.

But the best thing beyond getting your own liability insurance is for you to require your tenant to get renter's insurance.  For $150/year it protects them from theft, property damage, and their liability. The advantage here also is if something happens the tenant could go after his own insurance instead of making up a story and go after you, which may cause your insurance rates to go up if there are too many claims, or you lose your coverage if your insurer drops you.

Make sure contractors you use are licensed and insured, so when they screw up, they get sued instead of you.