Do real estate investors have enough liability insurance?

A basic landlord dwelling insurance policy comes with 100,000 of liability included on the policy.

This is not enough.

For an extra $15 you can buy 300,000 of coverage.

Some policies can go as high as 500,000.

When you have the opportunity, buy the highest limit possible.

You can never have enough liability protection.

You want to use insurance to protect you and your bank account.

When the liability runs out, your bank account pays the claim.

 

PROPERTIES IN YOUR PERSONAL NAME

As a real estate investor you started with one property and just kept buying up rentals in your personal name.

Nothing wrong with this but you must have a personal umbrella policy because one claim on one house exposes your entire portfolio of properties.

A personal umbrella policy is an additional layer of liability up to 10,000,000

The price starts around $350 a year

You need to raise your car insurance liability to 250,000

Your rental landlord policy liability limit to 300,000

This will allow you to purchase a 1,000,000 policy to start

You can schedule all your properties on one umbrella policy

 

PROPERTIES OWNED IN AN LLC

You can not purchase a personal umbrella policy if your properties are owned in an LLC

You need to purchase a Commercial Excess Liability policy

To qualify your underlying landlord dwelling policy would need 1,000,000 of liability

The problem companies don’t offer 1,000,000 of liability on the landlord policy

You would need to buy a stand alone liability policy for all your properties and also purchase a commercial excess liability policy

The premium for the commercial excess policy is usually $750 per 1,000,000 of coverage

 

HOW TO GET ANOTHER LAYER OF LIABILITY TO PROTECT YOURSELF

You can have your tenant’s purchase an HO-4 Tenant policy.

The is an inexpensive policy less than $20 a month

The tenant can purchase this policy from their car insurance company

You require this in the lease

The HO-4 policy includes at minimum 100,000 of liability

This adds a buffer of liability before your policy kicks in

So if the tenant starts a fire, has a party and someone falls down, the tenant’s policy is primary and your policy is secondary.

Simple and cheap way to insulate yourself.

 

CAN I PURCHASE ONE POLICY FOR ALL MY PROPERTIES?

Yes

You can buy scheduled policy and protect all your properties and get a 1,000,000 liability limit

The benefit is you have one policy and one renewal payment to monitor.

The bad is if you have a different mortgage company on each property and the property insurance is mortgagee billed

When you purchase one scheduled policy you have all your LLC owned properties listed on the one policy as well

 

ASSET PROTECTION FOR REAL ESTATE INVESTORS IS WHAT WE DO

From one property to twenty.

We can even take care of your commercial building  or apartments over 4 units

We can write a policy in your personal name or an LLC and provide liability on the same policy

The first thing you need is an insurance advisor to review your coverage and let you know where your protection is weak

Complete the quick contact form or gives us a call at 504.348.3131 and we can review