How much liability for home insurance plan?

4 Replies

Hello BP! I’m purchasing incestment property thIs month Its a duplex for $220k. Median income in the area is about $35k. I’m not purchasing through a corporation. Getting the proper insurance wIll be my protectIon. My insurance offIce offered me 3 threshold options for liability. At which point is it unnecessary? 300k - $1,275 500k - $1,285 1M - $1,345 Thoughts?

Hi Pedro - I wouldn't have even given my client the prices for the other options considering the cost difference is so little.  $1M is the way to go.  Your liability exposure is so much higher with a rental compared with a primary residence.

Hi Pedro, I would be happy to give you the recommendations I give to my clients (and especially investor clients).  Having the proper protection is crucial when spreading your liability and carrying a heavier asset portfolio.

I'll send you a message.

-Matt

I agree with @Casey J Burkhead .  The premium difference is so marginal that you might as well get the $1M policy.  

If you have other properties, it may be more cost effective to simply buy a $1M umbrella policy and then get $300k (or whatever the requirement is for your umbrella policy) liability homeowner policies on each property.  This would effectively be the same thing although, given your quote, I might just have the umbrella policy cover your other units and buy the $1M policy for your duplex due to the premium pricing.