Hi there,New here and to the RE investment world.My question:If I buy a property in a different state (say Indiana)/use an Umbrella insurance policy instead of Indiana LLC, and I reside in CA, can I forgo the Foreign LLC cost ($800), or am I still considered doing business in CA? 

I am hoping to try and stay with State Farm so I can add a umbrella to the property along with my House and Car.

An umbrella policy across all of the properties will most likely be more than the savings you'd generate by removing your personal property. 

However, I have taken the route of getting an umbrella policy.

It's not a big deal though, as an umbrella insurance policy probably gives you more protection than a simple LLC (any lawyers can chime in here and tell me I'm wrong).  

If your umbrella does not cover over the rentals have your agent check on PersonalUmbrella.com. 

Another coverage to consider is Water Backup.I would maximize the Liability coverage and consider an umbrella above it

There are a couple of ways you can hedge this, the first one is via an umbrella policy by your insurance company (you can get one that covers all of the assets), two the fact there is a mortgage means that you do not own the asset free and clear and have only limited equity so if some tries to sue you it may not be worth it.   

Forming a new LLC would allow someone to open a business checking account and track all of those expenses under one umbrella. 

I was thinking of whether to get an LLC or just obtain umbrella insurance and sufficient liability insurance.