How much Umbrella do I need?

[Mary M.]

What is the appropriate amount of Umbrella coverage does one need to ensure adequate/robust (but not excessive) coverage? 

To put some (fictitious)numbers out :

Prop 1 valued at 1million 

Prop 2 valued at 2 million 

Addtl assets valued at 750K

Assuming normal GL coverage, how much umbrella do I need?   Do I add up my coverage and subtract from the value of my assets? then what is left over is umbrella?? so confused! lol!~

[Jason Bott]

@Mary M. I have never been a believer in the rule of thumb of insuring your net worth.

Apply that rule to this scenario: Investor A has a high end STR in CA for $2M & Investor B has a 20 unit rental in Ohio worth $600k. I would argue Investor B should have much higher Liability limits due to the fact that they could be sued by 20 individuals all at once. In this case, even $1M only breaks out to $50k per tenant.

Determining your Liability limit is not an exact science.  I suggest $1M per location and work up from there.

I have a self assessment tool I will DM you that I have put together for my clients.  It asks 7 questions to help you zero in on a limit of insurance that you could feel comfortable with.