Installment #9 Insurance Issues for The Real Estate Investor - Umbrella Policies

[Ivan Oberon]

Installment #9 Insurance Issues For The Real Estate Investor

Umbrella Policies- Avoid the pitfall of assuming they are a panacea.

I've seen topics posted with a title of "Umbrella Policy or LLC" on various forums.It should never be a question of one OR the other.Remember, insurance is like the Archers & Knights that defend your castle.You still need your Castle Walls and Moat for a well rounded protection strategy for what is inside those walls.

I would also like to point out there are major differences between what most of you know as a "Personal" Umbrella Policy and a "Commercial" Umbrella Policy.This is a critical piece to understand when running your "business" of flipping houses or growing your rental property portfolio.

One of the most glaring dangers of your Personal Umbrella policy is the "business pursuits" exclusion!And let's face it, if your real estate investments are not a "business pursuit" in your mind, then you probably ought to consider divesting!

What is appropriate is a properly constructed package built on a solid commercial policy form with the ability to offer appropriate coverage for assets under any stage of occupancy or renovation, a simple monthly reporting format with no minimum earned premiums, the ability to waive co-insurance requirements, with no location limits, with the ability to insure multiple controlling entities, offer coverage in all 50 states, special form coverage with theft and vandalism and the ability to actually reduce premiums incrementally by aggregating locations, just to name a few little things.