Live Learn Invest

Should you get personal liability umbrella insurance policy?

December 12th, 2006 by Kenric

I briefly touched upon this in my post about landlord insurance and my credit score.  Umbrella insurance is designed to give you additional liability protection above and beyond the limits of your personal insurance policies.  An umbrella insurance policy can give you a large amount of added protection with fairly little cost. 

After researching the costs of obtaining an umbrella policy it was a no-brainer for me.  I think that an umbrella policy is a must have, not only landlords but for everyone.

Even if you are not an investor, you probably have auto, homeowners or renter’s insurance.  Take a look at your liability coverage on those policies and see if you think that it’s enough for you and your family.  Now imagine getting an additional $3,000,000 of liability insurance on top of that amount.  You’re probably thinking that $3,000,000 of coverage will cost way too much based on your premiums now.  But umbrella insurance is often inexpensive, especially compared to the added coverage you gain.  $1,000,000 of coverage will run you in the neighborhood of $200-$300/yr. A $3,000,000 policy will cost around $450-$500/yr. 

As a landlord, you want to extend your umbrella policy to your rental properties.  In order to get the umbrella to cover your rentals, you have to meet certain minimum liability insurance requirements on the rentals and pay an additional fee to extend the umbrella over them.  I think the additional fee was around $50 per property.  In addition, all properties covered within the umbrella had to be insured by the same company as the umbrella insurance. 

Posted in Finances | 1 Comment »
Stumble it!