How much in liability insurance coverage?

Question

Hello,

I recently changed my home insurance,  it was getting very expensive this year and I chose $100,000 in liability insurance for my triplex when electing. Should I get Umbrella insurance on top of it? How much does that cost? Appreciate your inputs.

Thanks

Kevin Hoag · Answer

@Peter Morgan I second what @John Mocker has to say, max out the individual policy limits first. If you look at a break down of your insurance and the cost per each individual coverage item you will see that liability is typically not costing you much money. The difference between 100k and 1million depending on you policy limits is most likely less than $10 a month. While liability claims happen far less than property damage claims when they happen they tend to be larger claims. I would not recommend reducing this coverage item to save money. Especially with 3 families living under one roof. Look to other areas of coverage to try and reduce your costs.

To answer your question about cost, one of my carriers offer 300k as the baseline amount of coverage. To increase to 500k is an additional $35/year and to increase to 1million is typically an increase of around $75/year. This is specifically for a rental property.

For a home owner policy the rate is extremely minimal. I have scene the cost from 300k to 1million increase a policy by only an additional $12/year.

Cameron Moore · Answer

Could not have said it better myself @Kevin Hoag, it always seems silly to me when agents write anything BUT $500k in liability.

@Peter Morgan, @Henry Clark is correct on HOW to look at your portfolio and situation. Look at the assets you have to lose and insure for that amount (or a bit more).

John Mocker · Answer

Peter,

If it was me, I would get the max. Limit on the Liability.  Most companies will go up to $500,000 on the Homeowners policies (some to $1,000,000).  Since you have a multi-family, an umbrella makes sense.  The umbrella policy provides a limit for Liability (generally they are written in increments of $1,000,000).  That coverage is used if a covered loss exceeds the limits of the underlying policy (Auto, Home, Dwelling Fire, boat, etc...).  Most umbrella policies will have required limits you need to have on the underlying policies.  Most will require $300,000 for the Homeowners Liability so you may have to increase the home policy to get the umbrella.

Eliott Elias · Answer

I would get 1,000,000 in liability

Henry Clark · Answer

Clarify why you are talking about your house and your triplex.   Are they tied together?

Henry Clark · Answer

Don’t answer.  How much are you worth?  Do you have streams of income through pensions, etc.

You should cover that.

Even with insurance they may not cover you if you were indifferent to the issues.  Cracked walkways, rotten steps,  etc. that you were aware of

Ask your provider.  Do some different figures.  On liability I would expect not a lot of difference between $1mm versus $2mm.

Talk with your agent.

How much in liability insurance coverage?

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