Complicated umbrella policy question

[Jim Smith]

Hi all, I have a complicated (at least to me) umbrella policy question. I live in California and have an umbrella policy for my primary home, autos, etc. My wife recently became 25% owner of a vacation home (her 3 siblings own the other 75%) which is currently occupied by an elderly family member. The house will ultimately be used as a rental. We sought to form an LLC for the home for asset protection, but one of the siblings refused to form the LLC (don't ask). So I sought to add my wife's 25% home ownership to our current umbrella policy. However, our State Farm agent told us we can not add this home to our current homeowner umbrella policy because we do not live there, so it can not be added to our homeowner umbrella policy. The agent said we need to insure the home as a "non-owner occupied" policy, aka rental dwelling. However, one of the other siblings (who lives in another state) was able to add this home to their USAA umbrella policy even though they don't live there. So why won't State Farm allow me to add this home to my current umbrella policy? Is it a State Farm issue? They stopped writing home policies in California this year, so does that have anything to do with it? Any suggestions?

I'd love to hear any of your thoughts! Thank you for reading!

[Bill B.]

1) why do you care if it’s insured as a rental instead of a vacation home or 2nd home? (Also not an owner occupied properties) 

1a) Is the old relative living in your wife’s property not paying rent? Are they paying utilities, property taxes and insurance? Make them get an umbrella policy  

2) Go to a regular umbrella insurance company like USLI. (Adding another rental property costs less than $20.)

You run in to all kinds of problems when you aren’t your insurance company’s ideal customer. Allstate wouldn’t insure more than 6 rental properties until my Agent wrote a “business case” explains why they should and they accepted 12. But now as I do exchanges, that exception doesn’t roll over to those new properties. 

You’re dealing a “generic person” insurance company. Try getting quotes from better companies that deal with more complicated situations.