Insurance Agent in Baltimore City MD? Umbrella vs LLC

[Nat Rojas]

Requesting Referrals for an Investor friendly insurance agent in the Baltimore City, Maryland area for a Commercial Liability Umbrella Policy (CLUP).

Current portfolio: 8 Rentals

BRRRR investor - another question is how the properties (or level of difficulty) will be added/removed to the Umbrella as the properties go in my personal name and then refinanced into the LLC.

Bonus question - If refinanced to an LLC, do I still need an umbrella? Understand this may require additional personal info as it may be case by case.

Still attempting to learn and understand! Any and all info is greatly appreciated. Thanks in advance!

[David M.]

@Nat Rojas

Can't help you with a referral.. But,

It really shouldn't be that hard to add/drop properties to an umbrella policy. As far as transferring your properties into a LLC, its discussed just about daily here on BP (and I've posted on it a lot), but be very careful about doing it. There are a bunch of legal pitfalls that people seem to get into in my layman's opinion. Especially when it comes to protecting/maintaining your corporate veil.

If anything, you need to refinance in the llc with a commercial loan since you want everything underneath the purvue of the LLC. Otherwise, your limited liability isn't fully realized. Also, you may (consult with at least one qualified professinoal) make the LLC look like an alter-ego in my opinion. Also, refinacing and having a commercial umbrella policy are non sequitor's. You determine if you need the policy according to your investment strategy, assets in teh LLC, and risk tolerance. Are these residential or commercial properties? You know that the umbrella only is effective when there is a "base" liability policy, right? Also, the llc isn't a "magic bullet" that prevents you from being sued. It only limits the extent that your assets are liable if you lose the lawsuit. So, anything owned by the LLC can be gone after by the suitors (which is why you shouldn't have the mortgage in your name and Title in the LLC's name). The point being, you still need the insurance to protect the assets that are in the LLC. More importantly, you need the insurance so that the insurance company's lawyers will handle the lawsuit. Otherwise, you have to defend the lawsuit, in which case you might win the case but effectively lose all your assets because of legal fees.

So, you see whatever youare doing as a BRRR investor doesn't make sense? If you are going to use the LLC, Title should be in the LLC's name. Yes, that means you need to pay for commercial loans. If you want the asset protection/separation of the LLC, that's part of the price.

You really should consult with a few qualified professionals.  Good luck.