Investor · San Diego, CA · Member since 2012 · 309 posts · 18 votes
Hey guys!
What type of coverage do you have for your rentals?
1. Liability insurance for each rental property (for example, 300K limits) OR
2. One million primary residence insurance with 1 million extensions to each rental?
I am shopping for an insurance policy for our new rental, and one of the insurance agents on BP suggested asking my insurance agent about option #2, stating it's considerably cheaper (each 300K liability costs 100-200$, vs 15-20$ for extending primary residence liability to rentals).
I have an umbrella policy, and it has some minimum coverage requirement on each property's underlying policy. I can't remember what it is but it's somewhere between $200K and $500K. I just get whatever the umbrella requires because if you don't, the umbrella would likely deny a claim on the grounds of failure to maintain adequate primary coverage.
What got me interested in this topic is that the BP member that is an insurance agent claimed these are HUGE savings (100-200$/year vs 15-20$/year per property if I do extensions...) He also mentioned I should shop around if my insurance agent does not offer this...
I have a $500k policy for each of our two properties, increased our home policy to $500k as well, then added a $1M umbrella on top of that. Our agent said we had to increase the limits of other policies from $300k to $500k in order to purchase the umbrella policy. I will probably increase the umbrella to $2M after the next property purchase.
Insurance must be cheaper in NV than in MI- I'd happily pay $100-200 per property per year!
We looked into both options with different agents and decided to put each property on it's own policy because if we did extension policies a claim on a rental could affect the clost of insuring our primary down the road.