The last time I shopped, insurance companies cover the Indy rentals but that's it meaning the umbrella policy does not cover the Indy properties as well.  

If you choose to have an LLC as a sole proprietorship you're not changing much (many advantages only occur in multi-member situations) and some extra umbrella insurance may be a better use of your time and money.

Umbrella with each one in an individual LLC, perhaps?

The liability coverage will come into play here.You can also increase your protection, using an Umbrella policy.Yes, until you make a claim, it's all wasted, just like that raincoat in your closet.Many will counsel you to use an LLC, but that does not pay to restore the property damages, nor keep you out of an injury suite.

Did we learn anything, yes but alot of half-truths too.Came home and created a Nevada S-Corp and put an LLC under it, assuming we would go national.Property bought was in Calif, so more expense to Foreign File both entities.Started looking into creating my own Property Mgmt (PM) business to control out-of-state holdings.Then I learned:PM requires a broker's license or to be under his control almost everywhereThat stopped National expansionwhich then made the S-Corp and LLC unnecessary (to me; I accepted personal risk)Did get good liability insurance and suggest an extra Umbrella policy if you're going to buy&hold (aka become a landlord).

Looking at your numbers, I wasn't clear how new the home was, so you might or might not have included enough for repairs but what I have found in my own portfolio is that when you get a few houses or buildings under your umbrella, you might have ONE that doesn't cash flow one year because you had to dump alot into it, but the others carry it, and the overall portfolio performs. 

. :)And between umbrella policy and liability for each property (with replacement cost, not current value), I hope I'm adequately insured.

Point is, payroll companies don't have insurance that will be the same as yours, they may have WC but don't necessarily need to have CGL, Excess, Umbrella, or Vehicle, so basically their advice is not solid enough.

For personal protection, you can also look into an umbrella insurance policy.

Now I have an umbrella insurance policy; if I have an LLC, can I just cancel the umbrella as I am more protected?