Liability Insurance
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Liability Insurance (by ToddB [MN]) Apr 19, 2019 2:23 PM
       Liability Insurance (by Jeff [CO]) Apr 19, 2019 2:39 PM
       Liability Insurance (by TA [CA]) Apr 19, 2019 3:26 PM
       Liability Insurance (by Robert J [CA]) Apr 19, 2019 3:38 PM
       Liability Insurance (by Pmh [TX]) Apr 19, 2019 3:41 PM
       Liability Insurance (by David [MI]) Apr 20, 2019 5:32 AM

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Liability Insurance (by ToddB [MN]) Posted on: Apr 19, 2019 2:23 PM

I read on here that it should match your net worth. I am not sure why that would be. One has nothing to do with the other. With houses I think you could carry a lower level as the number of people possibly affected at any one time is lower. Apartment buildings would need a higher number.

Anyways, I am looking for a number. We carry $5 million. I think it was a plucked from air number.

Liability Insurance (by Jeff [CO]) Posted on: Apr 19, 2019 2:39 PM

Umbrella insurance should match your net worth for obvious reasons.

Liability Insurance (by TA [CA]) Posted on: Apr 19, 2019 3:26 PM

Your insurance policy limit should be related to your liability. Using your net worth is a common rule of thumb, but you could have more or less liability. Successful claims relating to being a landlord for more than a million are very rare, and more than 5 million are almost unheard of. But if you also owned a business manufacturing fireworks, or making medical devices, $5m in umbrella coverage could be low. You also need to carry liability insurance for the specific properties separate from your umbrella insurance. What policy limit to carry will depend on how your properties are owned, what risk factors you have(dogs, pools), the cost of insurance.

$300k in liability on each single family/condo and $1m for umbrella is what we do now.


Liability Insurance (by Robert J [CA]) Posted on: Apr 19, 2019 3:38 PM

In curtain cases a lawyer going after a landlord will request copies of their liability policies. Therefore my basic home liability policy will be $300,000 to $500,000, the needed amount to obtain an umbrella policy. Then I will carry an umbrella policy for the excess coverage. Somewhere in the millions. I will not offer my umbrella policy to an opposing attorney, hoping he will drop the case or settle for my basic coverage. If he knew I had millions, he would go after a larger settlement.

I had one cheep SOB friend/landlord who only carried the minimum coverage on his auto, home and rental properties. One day he was coming to a stop sign and the sun momentarily blinded him. He went past the limit line and hit a pedestrian in the cross walk. He only had $50,000 total coverage on his auto policy with no umbrella or excess coverage. The pedestrian's medical bills were around $125,000 and they were seeking 3-times the damages, around half a million dollars.

Without a personal umbrella policy and coverage for and auto claim, he had to pay $300,000 to settle the case out of his pocket. All those years of saving premiums didn't pay off in the end.


Liability Insurance (by Pmh [TX]) Posted on: Apr 19, 2019 3:41 PM

I do umbrella $5m. is more than my net. no connection.

Liability Insurance (by David [MI]) Posted on: Apr 20, 2019 5:32 AM

When I first started buying rentals, I started out with $1m umbrella. Upped it to $2m at around 10 or 15 properties. Now that that market is peaking and there's nothing to buy, took the extra cash and invested it in $4m umbrella. Will probably up it to $6m soon ......

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