I recently purchased a property in my personal name and my plan is to transfer it to an LLC. My existing insurance company told me if I transfer the property to an LLC, then I will need to get a commercial insurance policy. I asked if the LLC could be added as "named insured" and they said "no". I also have a personal umbrella policy that will not provide coverage on a separate commercial policy. My goal is to buy and hold property.
Has anyone experienced this?
Any recommendations on how to structure things?
Any recommendations on commercial insurance companies?
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
Glad you at least looked into it first and talked to your insurance provider @Chad W.. Most don't. Make sure your title insurance will still be active as well. They issued that to you.
Then make sure you never have to refi the house again, that is, if the lender doesn't call it due on you after finding out you transferred it because insurance is changing.
Only natural persons get the great long-term fixed residential rates. You will be stuck with crummy commercial loans from here on. Adjustable, callable and bothering you every year for your taxes and financial statement.
How's that for 'asset protection'? I save LLCs for commercial properties, not little houses with debt. Good luck.
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
8y
@Chad W. this is a common occurrence and easily handled with commercial insurance products.
Structure - if you are moving forward with wanting to put your REI into separate entities for asset protection, then you will want to have 2 separate insurance programs. 1 for your personal home, auto & umbrella and 1for the REI.
As for insurance carrier recommendations, it depends on if you have a SFR, retail building, multi unit, etc.