I’ve heard it’s crucial and also have heard it’s not needed, especially with umbrella policy.

You carry a couple of million $$ in umbrella coverage.The only renter's policies I'm familiar with cover their belongings, not their liability.

If it's just liability protection my $1M umbrella policy costs me ~$250/yr which is less than the minimum franchise tax board tax of 800/yr, SE tax exposure for yourself, etc.Also, it maybe a disregard entity (single member llc), which means it's all reported on one's 1040 schedule C.I learned all of this the hard way

@Lynn - is your umbrella liability policy part of your primary homeowner's insurance policy or did you open a separate policy?

That means you simple include their income on Schedule E.In Alaska it is $250 for the initial LLC filing fee plus the Biennial report is $100.Either way I recommend a good quality Umbrella policy.

Also, I've been meaning to open an LLC and get an umbrella policy. 

. $200 cashflow off the MLS after expenses (including property management and umbrella policy)?

Truly not much more to say, aside from also considering a rider policy (umbrella) if you feel the need to increase your coverage options.

I hear recommendations that I might want to have umbrella policy as well.

I thought about increasing my umbrella from $1 million to $2 million.