Should I have/need both a landlord insurance policy and an umbrella insurance policy for my single family rentals? Thoughts?
You would get insurance for the property itself and then you can obtain an umbrella policy for excess coverage depending on your assets. Where the umbrella policy is of more significance is to cover you in the event of an auto accident. Lets say you mow down a pedestrian causing significant bodily injury and a verdict comes back over your auto policy, guess whose investment properties are vulnerable? That is where the umbrella policy is truly valuable.
@William R. Matthews IV ...@Jason G. is right! Think of your umbrella policy as overdraft protection for your primary policies should you be liable for damage to another's person or property. Once your underlying limits are exhausted, your umbrella policy steps in to pick up where they end. This is why I believe it's worth it to have one.
Thank you so much folks for your reply. Is it standard Lingo that you're not covered for these things below? My insurance provider says it's normal.
"The list of forms and endorsements that apply is showing you the forms that will be with your policy jacket when it comes. The specific exclusions listed on this binder state the policy doesn't cover for: Earth Movement or Earthquake, Lead Contamination, Injury resulting from Trampoline, Mold & Fungus, Domestic or Sexual Violence, War & Terrorism, Injury resulting from Pool, limited injury from Dog & Wild Animal. These are the same type of exclusions in most home/property policies"
@William R. Matthews IV Careful here. There are 3 types of policy's not 2. At least in Colorado. The first line of defense for your rentals is your landlord policy. Mine comes with $300k liability and covers loss of income ifthe unit becomes in rentable. For very little money I increase the liability to $500k. Next is my business umbrella. This policy covers an additional $1 million in liability and will provide attorneys when needed. This protects my other buisness assets as well as my personal assets in the event of a liability suit. The total protection is 1.5 million. The third insurance is a personal umbrella. This is the one that the other poster was referring too. Mine is $1 million here as well. Somebody suing me for liable would have to be awarded 1 million in damages before they could go after my personal or business assets. It is an additional 1 million in protection between my personal assets and a liability suit coming from somebody injured by some business activity resulting in 2.5 million protecting my personal assets against such a lawsuit. It also will provide defense attorneys. How much or how little you purchase would depend on how much your net worth is and how much risk you have with your buisness endeavors. RR