My Biggest Fear - Personal Liability Coverage

[Michael A.]

Hello BP Community, I'd like to open up a bit and share the biggest fear my partners and I have as we get off the ground with our first SFH rental. This group has been so encouraging thus far, thank you all We're terrified (strong word, but perhaps appropriate for us) of what might happen if a tenant were to injure themselves at our property. We're not solely financially independent yet, so the thought of continuing to pay for our property out pocket does not phase us nearly as much as the treat of a multimillion dollar lawsuit stemming from a terrible personal injury. Maybe I've seen too many personal injury attorney tv ads? Maybe being slapped with a bill in the "millions" makes me think my life would be over? Maybe I'm overreacting? Whatever the case may be, it is our biggest fear. I'm curious to know how you all have reached a level of comfort (high on the "I can sleep at night" spectrum) with regard to liability coverage at your properties. Thanks f or all of your advice thus far!

[Jason Bott]

@Michael A.  a few points / observations to consider late at night when you can't sleep.

1). there are umbrella policies in the marketplace that cost $1,200-$1500 per year for a $10M-$15M limit.  

2) I insure one of the larger Aesbestos contractors in the Midwest that does work in schools. You could easily think up many crazy claim scenarios. They have a $10M limit. A SFR is way less risky than that.

3) my REI who have around 1,000 units carry between $3M-$5M limits.

4) I personally insure 7,000-8,000 units , with the largest settlement to date being $50,000.

Hope this helps reduce your fears of reduce your fears of owning some rental properties.