Umbrella Policy for Rental Home or in General..Needed?

[Hardatit]

Let's talk umbrella policies. I'm considering one. I have small business (online sales) with an LLC and I have a single rental home (not an LLC) and I'm considering purchasing one.
I can get a $1M policy for $250 yr and $2M for $360 a yr. Since I have to up my liabilities to $300K/$500K on my automobile policy from my current $100K, in order to qualify for the umbrella policy, it ends up costing more like $550 a year.

I have $1M liability on my home and rental property already. I don't actually think that it would cover a lawsuit for my business anyway, since I don't have any type of business insurance.
Just tossing it around whether it would be smart to get one.

Who all has an umbrella policy and at what point did you decide you needed one?

 

[Winemaker]

I have 3 rental properties and my own residence. I have 4 2 million umbrella policies for each of the properties. My attorney advised me if I purchase another(ain't gonna happen, but never say never), he suggested then to put them in a LLC or two or three. The 3 rentals are titled to DW as she has less investment accounts to be able to snatch on. We refinanced the rentals into our main residence last year. They can sue and take the house but it's mortgaged to the hilt.

 

[Sunset]

I have $2M on my rental.
I would not rent without one, one fall/slip/ etc and you are looking at big lawyer fees to start.
The insurance is a lot cheaper than a lawyer, otherwise you have to hire one, while some poor tenants will get free legal aid, so they can keep jerking you in court.
Heck just an eviction takes about 4 months in IL

 

[wolf]

Use to have $1M umbrella. Last year increased it to $2M. May, increase to $3M. If you have a large net worth. And the unexpected happens. Expect to be sued!

Have Rentals, and Residence/Autos. AAA told me, One Umbrella would cover all.

 

[BeachOrCity]

Financial roulette if you don’t have one.

Get it!

 

[Stormy Kromer]

Whatever you do, increase your auto liability limits from $100k. Increase your Uninsured & Underinsured motorists while you're at it.


I took out an umbrella when my net worth exceeded my underlying liability limits.

 

[HarveyS]

Agree you need an umbrella. I have one for about half my NW. But why isn't the rental in an LLC?

 

[mrfeh]

No rentals here, but have had umbrella policy ever since net worth got into 7 figures.

In a liability situation, lawyers will find out how much you can be tapped for.

 

[Bruceski44]

The way it was explained to me, a large umbrella policy ensures your insurance company will be actively fighting on your behalf. It brings them to the table, because they don't want to make a big payout.

 

[Sunset]

The way it was explained to me, a large umbrella policy ensures your insurance company will be actively fighting on your behalf. It brings them to the table, because they don't want to make a big payout.

+1
That is my view, plus I feel it has nothing to do with net worth. It's simply a matter of how much is reasonably expected someone would settle for getting.

If anything, the award in a lawsuit is often determined by the victim.
A teacher losing a hand in my sink garbage disposal might get $X awarded by a jury or judge, but if that person was a surgeon, I expect they would be awarded many multiples of $X.

 

[Hardatit]

Thanks for the replies, I just acquired the rental house last year. Been debating whether to do an LLC on it or umbrella or both. I was told by two lawyers to go with the umbrella policy and that a good lawyer will find his way around an LLC.

I've considered an LLC but was leaning more towards doing the umbrella policy and no LLC. With just one rental, would it be worth the LLC?

 

[RunningBum]

I have 3 rental properties and my own residence. I have 4 2 million umbrella policies for each of the properties. My attorney advised me if I purchase another(ain't gonna happen, but never say never), he suggested then to put them in a LLC or two or three. The 3 rentals are titled to DW as she has less investment accounts to be able to snatch on. We refinanced the rentals into our main residence last year. They can sue and take the house but it's mortgaged to the hilt.

I haven't heard of an umbrella policy attached to a property. I would think that you'd have a single umbrella policy to cover you and your wife, over and above the landlord and homeowner liability limits. Maybe I'm wrong about that. Or maybe I'm reading your post wrong. If I read it literally you are saying you have 4 umbrella policies for each property, which would be 16, but I'm guessing that you mean you have four umbrella policies, one for each property.