As a landlord, you must consider your family’s safety and security as well as the security of all your rental properties, your tenants, and any potential liabilities. This is where umbrella insurance becomes useful. However, it might be a little confusing to know which liabilities are covered and which are not.
This blog will help dispel the mystery surrounding umbrella insurance rental property and provide a better understanding of what it is.
What Is Umbrella Insurance?
Like an ‘umbrella’ term that covers a wide range of items, a wider range of liabilities are covered under an umbrella insurance policy. This ‘excess liability’ policy, which covers both your auto and home/renters insurance, is likely to offer higher coverages than standard policies. The amount usually is a minimum of $1 million.
While an umbrella term will cover third-party damages if you are at fault for an auto accident or pay medical bills if someone is hurt on your property, it also specializes in protecting against a wider variety of liabilities. As an example, it also covers paying for legal expenses (regardless of whether you are found at fault), a false arrest, libel/slander, and dog bites, as well as responsibility while volunteering.
What Is Covered Under Umbrella Insurance?
In the following scenarios, having umbrella insurance as a landlord may put you at ease:
- Injury to your renters or visitors in public spaces on your property, like a gym, patio, or stairway.
- Injury to a third party on your unoccupied rental property, mainly local children.
- A third party suing you for damage your tenants may have caused.
- Enduring a privacy invasion lawsuit from your renters.
- Paying for legal defense if you are sued for any of the causes or more.
What Is Not Covered Under Umbrella Insurance?
Your umbrella insurance won’t protect you from any liability if you manage your rental homes as a business or LLC. In this situation, you also need business liability insurance in addition to your umbrella policy. However, if you manage several properties as part of your business and would like to receive higher liability coverages, you can choose to opt for an umbrella add-on policy to your standard landlord insurance, which shall help cover all your liabilities.
How Much Umbrella Insurance Do I Need?
To cover the entirety of your assets, you may want to consider purchasing an umbrella policy, which, as previously stated, typically starts at $1 million and can go up to $5 or $10 million. While this may appear to be a lot, the liability cushion you receive when holding multiple properties over will be much greater than what you initially invest, demonstrating that it is low-cost considering the liabilities it covers.
Jack Stone Insurance Agency Can Help You!
Umbrella insurance is a smart choice for you as a landlord because it offers all-around protection for all your assets. Contact our team of experts here at Jack Stone Insurance Agency today to find an all-rounder umbrella policy tailored to your specific requirements or if you have any more questions about an umbrella policy.