Named Insured vs Additional Insured

[Kathryn Schauer]

Just purchased my first rental property.

The insurance company has a sort of a "Master Plan" agreement with the property management company I am using.  As such I get a quote that is cheaper than normal as long as I am using that property management company.

The Named Insured is the Property Management company, and the Additional Insured is my name.

When I questioned this, they said they set it up this way so that the property management company can file claims on my behalf, without having to wait for me as the owner to do it.  This property is out of state and the property management company apparently is used to very hands off investors.

First question:  Does this Named Insured vs Additional Insured seem like the correct setup?  What issues could this cause if there were a lawsuit of some sort?

Second question: My personal limit is $1M, and General Aggregate limit is $2M. Do these seem adequate? And if you had these limits would you still want an umbrella policy in addition? I realize you can't know how much someone is going to sue you for in the future for some unknown reason, but as a general rule, how much is industry standard for one SFH?

Thanks!  

[Jason Bott]

Originally posted by @Kathryn Schauer:

@Jason Bott Thanks so much for the reply.  So helpful to know that this is common.

This setup prevented me from being able to get umbrella insurance through my personal homeowner's insurance company, however. They saw that the Named Insured was the property management company, which is an LLC and so they said they didn't offer any umbrella that would cover me.

Yes, you would need to get an Umbrella over just the property and the name on the deed.  If it is going over a commercial policy, minimum would be $400 for the policy.

The reason your insurance carrier will not go over the PM's LLC is that they could get pulled into any lawsuit filed against the PM, not just your property.