I got an umbrella policy for liability only for about $1700 annually and it has $1m in coverage.

If it's a premises liability matter and falls outside of general liability coverage, do you really believe the plaintiffs attorney who is likely working on a contingent fee basis cares to pursue the claim against the defendant regardless of whether there are real asset?

.• Many investors hold CA rentals in their personal name (with strong insurance/umbrella coverage) to avoid these fees, unless liability exposure is a big concern.• From a tax perspective, LLCs in CA are pass-through, so the income and depreciation still flow to your personal return.Texas rentals:• Texas doesn’t have a state income tax, which makes holding STRs here more straightforward.• An LLC in TX can give you liability protection without the heavy franchise taxes CA charges (the TX franchise tax only kicks in above ~$2.47M revenue in 2025).• If your STRs qualify under the STR material participation rules, you could use bonus depreciation to offset W-2 income—LLC ownership doesn’t take that away since income still flows through.Cross-state strategy:• You don’t necessarily need one LLC per property—many investors group properties (by state or risk profile).• You could form a Texas holding LLC and register it as “foreign” in CA if you want uniformity, but this means you’ll still pay CA’s $800 tax per year.• A common approach: keep CA rentals in your own name with strong insurance, put TX STRs in a TX LLC, and avoid mixing states in one entity.Tax angle:• Whether you hold rentals in an LLC or personally, depreciation, expenses, and Section 179/bonus depreciation still flow through to your return.• The entity affects liability more than taxes—unless you elect S-Corp treatment for active businesses (not usually recommended for rentals).This post does not create a CPA-Client relationship.

If you ever need extra coverage, a co-host can be a good backup.

Many times they’ll accept agreed value or proof of 100% replacement cost coverage. 

@Manuel Llanas I'd probably keep the cash flow that you're getting from the asset and supplement that with your VA disability pay.

They either want to present their claims in a manner that triggers insurance coverage or obtain a monetary judgement against the entity that owns real estate.

If you can get to around 30 units you can get a commercial policy and save some serious money on coverage.

Is anyone having trouble getting insurance coverage after filing a couple of claims?

Less safe ------> more safeLLCs: None --> Mutliple homes in one LLC --> Individual LLC per homeInsurance: Low limit --> high limit --> umbrella coverage