House Hack - Umbrella Insurance

[Alex Ferraro]

I'm closing on my first househack in late January and have been struggling with the decision of what kind of insurance to get. I know there have been discussion on umbrella policies, but none quite answered my specific questions.

If I only have one house and currently less than $100K in assets, is it worth getting an umbrella policy? Furthermore, do you ever hear of anyone having their wages garnished in some kind of a lawsuit that would have been prevented with an umbrella policy?

For those in Chicago, is flood insurance worth getting? I will be in Logan Square. I haven't heard much of major floods in the area and it is not in a flood zone that I know of. Any advice or feedback is appreciated!

[Jason Bott]

Originally posted by @Vincent Tan Liao:

I'm pretty much in the same boat as you. I closed on my first house hack last March and have a similar asset amount.

Not sure if I can really answer your questions directly. I can share with you what I did.
I was told by my insurance rep that you don't want to be underinsured or over-insured. I have an umbrella to cover me for liability. That costs me $80 a month. Its bundled in with the Home insurance.

Since I just started my loan, the bulk of the value of assets (liability coverage) I don't even own, I don't have much equity in my property yet but we count the total value of the property.
Will that be worth going after if I get sued? Probably not but I'm not entirely sure. At the end of the day I looked at the $80 a month extra and it was worth the peace of mind.

I cannot speak about wages being included in a lawsuit. And I did no not have flood insurance. I have a basement but it is unfinished. If I end up doing something more with the basement perhaps I will get flood insurance.

I guess as a follow up question to yours.
In getting an Umbrella policy would you get
coverage for your Net Worth: Assets - Liabilities
or
coverage for your assets, that includes property values without subtracting the loans.

 Vincent, if your Umbrella is covering your home and auto only, you can get an annual policy for $1M for $150-$300 per year.  I'd suggest calling around to some other Home and Auto agencies.  $80 per month is very high and more in line if you had 30 rental units.