Is $500,000.00 in Personal Liability Addequate for Owner Occ MFR?

[Michael Craig]

As you know, we live in a society where you get sued for looking at somebody the wrong way. As I am shopping for insurance, I can't help but ask myself, "what is adequate coverage for my owner occupied, 3 family home?". Most quotes I receive default to $500,000 in personal liability - is this adequate? 

Keep in mind that this home, my $6,000 car and my 401K are the only notable assets that I own. The house is not under an LLC. What are your thoughts? Thanks!

[John Mocker]

Michael,

There's no correct answer to your questions.  Without knowing the future and what the specifics of the loss there is no way to assess if the $500,000 will be enough.  You have two units rented to others, do any of the units have:

1. Children

2. Pets

3. guests on a regular basis

These are just some of the questions that I would consider.  A personal Umbrella policy gives an additional limit of liability that kicks in if the Homeowners Liability coverage is exhausted.  It is sold in $1,000,000 increments.  I would get a quote on an Umbrella policy and see the cost.  Depending on the number of vehicles, age of drivers, number of properties owned, the rates can be very affordable.