1st Rental Property / Insurance Question

[Angela Pipitone]

Hey all,

I have my 1st property under contract, it will be a rental (it is currently vacant). I'm trying to make a decision between a landlord policy or an umbrella policy and I'm leaning towards landlord policy. My insurance agent let me know I would have to raise all of my coverages in order to even get an umbrella policy (I have 2 cars and a primary residence that I pay state minimums on in insurance). I don't have much assets other then my house, my car is a 2011 and a 2010, not much value, there's about 20k equity in my primary residence and there will be 20k equity in my investment house. I guess overall I don't see the value in getting the umbrella, I feel like that's for more established investors with a higher net worth. The difference would be about $75 a month more for the umbrella, which would eat into my cash flow on the property. It is a rough neighborhood that I'm renting in.

I know ultimately this is a personal decision, but any experienced investors that could throw some thoughts out there so I can do some research, look at it from a different point of view and/or help me come to a decision would be greatly appreciated!!

[Ron Brady]

We have a landlord policy on every rental we own and did so from the very first one.

On the umbrella, the question for you is: Am I OK with losing all that I have if I am sued?  You shared that you have limited assets, but the real question is the one above.  If you are not ok with losing what you have, we recommend getting the umbrella insurance. If you are OK with losing it all, then we´d recommend you wait to get the umbrella and that you get it when you reach the "I cannot afford to lose this" point.