I immediately obtained a $2M umbrella liability policy. 

Is an umbrella insurance enough?

This includes an umbrella policy in addition to insurance for the dwelling. 

My insurance agent called me today to tell me that my personal umbrella policy covers up to 4 units, and that now that I have 7 units, it won't cover any of them.

Account ClosedHi Mackalyee, I won't be running this property out of an LLC (will be using umbrella insurance to cover personal liabilities) so i assumed that lenders would be more willing to lend at 20%, but i re-ran the numbers at $25k down which makes the deal appear to be closer to a 10% cash return in Y1.

They have a listing agent involved who will probably try to kill the idea of seller finance, but that's an assumption on my part.I didn't know if creating an LLC with the sellers and buyer as members, bringing the assets under the umbrella and then allowing to the buyer to buy the sellers out would work. 

Ive been with liberty mutual for my home insurance and umbrella policies for rentals.

Use your name and insure (liability and umbrella) to the max!

There’s a lot of debate about setting up an LLC or just getting a big enough umbrella policy.

I suggest getting a big ole umbrella policy if you are concerned with liability.