How much liability coverage for rental property needed?

[Brandon Glick]

Hi all,

First time investor here, partnering with a friend who has invested in other properties before.

He has used a specific insurance broker before, and the insurance broker is saying that the max liability coverage we can get is $300K. My net worth is substantially higher than that, so I would like additional coverage. Is $300K really the max amount you can take out? Or is the broker just misinformed?

I've also read about umbrella policies but wasn't sure about the following:

1) I don't have auto insurance (i don't drive), so wasn't sure if this would affect that. Does anyone know?

2) Does the umbrella policy work for both of us? Or is it individual?

2a) If 2a, how does it work if we bought the house as a tenant in common? Would the umbrella policy only cover up to 50% of the liabilitity? From my understanding, even though we are both responsible for any liability, it's not a 50/50 split (i.e. if it's a 600K judgement (in this hypothetical, assume no insurance coverage) and I have 500K in assets and he has 100K, it's not like I only owe 250K, the court would make me pay 500k right?

Thanks in advance!