Umbrella Policy for Out of State Rental Property

Member since 2024 · 3 posts · 1 vote

Hello everyone. I am currently house hacking my primary residence in California and just bought a rental property in Indiana. I tried getting an umbrella policy to protect myself in case something happens but was denied since not everyone in my household is under my auto insurance. Is this generally true for all insurance companies? Does anyone have recommendations of what I can do or where I can look to get liability insurance? Thanks!

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JD MartinBusiness Member

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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes

I don't have anyone else in my household other than us so no idea, but I've never been asked the question either. My insurer is Erie, for everything including my umbrella.

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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
1y
I’ve never even had an umbrella company so me about other members. Try USLI they were great until they limited liability at $1M if you have a pool. Then I switched to Madison.
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
1y
I don't have anyone else in my household other than us so no idea, but I've never been asked the question either. My insurer is Erie, for everything including my umbrella.
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Aristotle Kumpis
Specialist · Long Beach, CA · Member since 2011 · 877 posts · 398 votes
1y
What are you trying to protect yourself from? If you need more coverage, you can usually increase the liability amount on your current policy. I have some rentals that go up to $1M in liability. So you don't need an umbrella.
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Lisa Ngo
OP
Member since 2024 · 3 posts · 1 vote
1y
Thanks everyone for your input. I am trying to protect myself in case something happens to my tenants on the rental property and they decide to sue.
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
1y
Quote from @Aristotle Kumpis:

What are you trying to protect yourself from? If you need more coverage, you can usually increase the liability amount on your current policy. I have some rentals that go up to $1M in liability. So you don't need an umbrella.
I don't agree with this. Umbrella insurance is crazy cheap for the benefit, and it already requires you max out your liability on your other covered items. I pay $119 a year to bring my coverage up to about $4 million. I would never not carry it. I've been involved in a lawsuit that settled right at a million dollars, and that was over 20 years ago. It's nothing in today's dollars. I would agree that the likelihood of having any lawsuit go against you for more than a million is very small, but the coverage benefit is just to cheap to skip.
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Owen RosenBusiness Member
Professional · Clinton Township, MI · Member since 2015 · 678 posts · 259 votes
1y
Quote from @Lisa Ngo:

Hello everyone. I am currently house hacking my primary residence in California and just bought a rental property in Indiana. I tried getting an umbrella policy to protect myself in case something happens but was denied since not everyone in my household is under my auto insurance. Is this generally true for all insurance companies? Does anyone have recommendations of what I can do or where I can look to get liability insurance? Thanks!

What do you mean not everyone in your household is under your auto insurance?
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Owen RosenBusiness Member
Professional · Clinton Township, MI · Member since 2015 · 678 posts · 259 votes
1y
Quote from @JD Martin:

Quote from @Aristotle Kumpis:

What are you trying to protect yourself from? If you need more coverage, you can usually increase the liability amount on your current policy. I have some rentals that go up to $1M in liability. So you don't need an umbrella.
I don't agree with this. Umbrella insurance is crazy cheap for the benefit, and it already requires you max out your liability on your other covered items. I pay $119 a year to bring my coverage up to about $4 million. I would never not carry it. I've been involved in a lawsuit that settled right at a million dollars, and that was over 20 years ago. It's nothing in today's dollars. I would agree that the likelihood of having any lawsuit go against you for more than a million is very small, but the coverage benefit is just to cheap to skip.

You don't need to "max out" liability to qualify for an umbrella. You just need to have certain minimum underlying requirements per policy exposure.
I do agree that having $1 million in underlying coverage is not a sufficient reason to not consider an umbrella policy.
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
1y
Quote from @Owen Rosen:

Quote from @JD Martin:

Quote from @Aristotle Kumpis:

What are you trying to protect yourself from? If you need more coverage, you can usually increase the liability amount on your current policy. I have some rentals that go up to $1M in liability. So you don't need an umbrella.
I don't agree with this. Umbrella insurance is crazy cheap for the benefit, and it already requires you max out your liability on your other covered items. I pay $119 a year to bring my coverage up to about $4 million. I would never not carry it. I've been involved in a lawsuit that settled right at a million dollars, and that was over 20 years ago. It's nothing in today's dollars. I would agree that the likelihood of having any lawsuit go against you for more than a million is very small, but the coverage benefit is just to cheap to skip.

You don't need to "max out" liability to qualify for an umbrella. You just need to have certain minimum underlying requirements per policy exposure.
I do agree that having $1 million in underlying coverage is not a sufficient reason to not consider an umbrella policy.

I should have specified that the policies I have had with my last two carriers (State Farm and Erie) required maxing out the liability protection offered on my properties before they could be listed under my umbrella policy. Other carriers may have different policies. I know my SF policy offered up to $1 million on each but I don't believe Erie policy goes that high which makes the umbrella even more important. And this also may be state dependent, as my FL property is covered under a different carrier who has different available maximums for liability.
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Allan C.
Rental Property Investor · Member since 2018 · 826 posts · 810 votes
1y
@Aristotle Kumpis how much does your car insurance cover? What happens if you are sued beyond coverage limits of your car insurance? Why wouldn’t you want an umbrella covering the limits of your other policies.
I generally believe insurance is not worth the value in most circumstances (otherwise those companies wouldn’t make money), but I am a big believer in umbrellas.
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Lisa Ngo
OP
Member since 2024 · 3 posts · 1 vote
1y
I have landlord insurance but wanted to get an umbrella policy for additional protection. Because the Indiana property is my first investment property and is not in a LLC, I was advised to get an umbrella policy. I tried getting one through the same company as my landlord insurance, but they said they cannot offer me anything since I am in California and that I have to go with my auto insurance. I talked to my auto insurance (AAA), but they said I do not qualify because I have people living in my house who are not under my auto insurance policy. I am currently renting out rooms in my house so the renters have their own auto insurance.

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Warren A.
Bay Area, CA · Member since 2016 · 79 posts · 43 votes
1y
I have primary in CA and OOS rentals. Finding an umbrella has been very challenging for me for years for one reason or another but I was able to get an Umbrella quote from Steadily recently that covers our CA primary, autos, and our OOS rentals. I am not house hacking however so I don't have that issue.
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