Commercial Insurance Policy and Liability Amounts

[Chad Hotovec]

I'm currently in the middle of my first deal, which is exciting. Learning something new every day. Part way into the process we decided to not purchase the house using conventional financing but instead us a commercial loan in order to the deed in the name of the LLC. I checked the numbers and they were tighter than before but still manageable. They met my criteria.

However, quotes that I had received for insurance were based on the property being in my name with a $500k liability coverage.  I've found a property management company that has a contract stating $1MM is a minimum, which is naturally killing my numbers.  

Is $1MM normal for a single SFH?

Any advice or guidance would be greatly appreciated.  Learning something new everyday.  

Thank you!

[Jason Bott]

@Chad Hotovec going from $500k to $1MM in liability coverage should a nominal increase, say $20-$30 per year.  Sounds like you need to check with some other brokers/insurance carriers.

I see $1MM liability for rentals as a standard limit for most landlords.  I personally do not write policies with lower than $1M liability as the savings does not out weigh the risk.