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Updated about 5 years ago on . Most recent reply

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57
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Kyle Myers
  • Investor
  • Manitou Springs, CO
25
Votes |
57
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LLC or Umbrella insurance?

Kyle Myers
  • Investor
  • Manitou Springs, CO
Posted

BPs community,

I recently went under contract for our 3rd rental property.  I know as we get more and more properties we are under more and more risk.  My question is, is the best way for us to avoid risk to set up LLCs or merely get and umbrella policy to cover us?

Most Popular Reply

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Jason Bott
#2 Insurance Contributor
  • Insurance Agent
  • Nationwide
1,431
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2,494
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Jason Bott
#2 Insurance Contributor
  • Insurance Agent
  • Nationwide
Replied

@Kyle Myers a few things to consider in your decision.

You can easily purchase an additional $1,000,000 of additional liability for $400 per year to go over all of your properties. $800 for $2M, $1200 for $3M, etc. This premium can be less if you have your home and auto insurance company is willing to offer you this umbrella over your personally owned properties. You may want to do this while you talk to your lawyer, banker & accountant about the ramifications of an LLC and your current situation.

An LLC will protect your personal assets from claims on your rentals. But you may still want to purchase an Umbrella over the LLC's to protect the equity in those LLC's.

  • Jason Bott
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