Insurance Options for Rentals

[Ray Evans]

This is my first real post I think, so let me know if I did something wrong :-)

We're a couple years into this journey, and I've been somewhat disappointed in the rates we're getting on insurance for properties held in our LLC. In trying to shop around, I recently got a quote that was about half of what I am paying now, and I noticed liability coverage was reduced and there was no fair rental value coverage. That got me wondering what other people carry or don't with regard to those options.

Do any of you guys do fair rental value coverage?

How much liability do you carry for your properties?

[John Mocker]

Ray,
Its a bad sign when they are reducing important coverage to make the price seem better. If they gave you that as an option and explained the added risk you might choose that option or you might not.

Whether in an LLC or in your name my advise is always to purchase the maximum coverage. The more coverage available, the less likely that they will go after the asset or try to break the corporate veil to sue you personally.

The Fair Rental value (aka Loss of Rents) pays for the lost rental income after a covered loss. Say the house has a fire and it takes 6 months to repair and get the tenants back in you've lost 6 mos. income from that house.