Is Umbrella Insurance Necessary for a Rental Property?

Umbrella insurance is extra liability insurance that supplements your traditional insurance policies. It covers you for liabilities related to legal fees, libel, slander, dog bites, false arrest claims, or any other situation where you are held responsible for property damages or bodily injuries sustained by another person.

How Umbrella Insurance Can Cover You as a Landlord

Umbrella insurance is an asset for landlords who own multiple rental properties. If you are a landlord, you are responsible for the health and safety of your tenants, as well as their guests. Umbrella insurance can alter your liability limits if you are held liable for something that happened on your rental property.

The following are a few common situations where you may be held liable as a landlord:

  • One of your tenants is injured in a common area such as a lobby
  • A third party sues you for your tenants’ misconduct
  • A tenant sues you for invasion of privacy
  • Someone breaks into your rental property
  • A visitor gets injured on your vacant property

As the landlord, you are responsible for managing the communal areas. Make sure that the structure of your property conforms to the current building code. Perform regular maintenance on your property to avoid potential injuries. Also, make sure that all of your tenants have renters insurance.

Possible Exclusions

Your umbrella insurance may not cover any liability issues related to your professional endeavors. Therefore, for liabilities resulting from your professional activities, you will need a separate business liability insurance.

You may be able to add umbrella insurance to your landlord insurance policy. Landlord insurance covers property damage up to the liability limit. If you operate multiple rentals for business, you can purchase a landlord-specific umbrella policy. Besides, if your landlord insurance is connected to your business, it could be tax-deductible.

How Much Coverage Is Necessary

If you are a landlord, you want to make sure that you protect all your valuable assets. The higher your net worth, the more you are at risk of losing everything. Even a small slip on your rental property may cause you to lose your entire building.

Thus, when looking for the right amount of umbrella insurance, make sure that it covers all of your assets. The coverage can be as low as $1 million, extending up to $10 million depending on the value of your assets.

As a landowner, especially as one with multiple rental properties, an umbrella insurance policy will give you that “excess liability coverage” that exceeds the limits of your standard insurance policies. This way you can rest assured that your valuable property is adequately protected at all times. To secure the most reliable umbrella insurance, talk to our experts at Jack Stone Insurance Agency. Contact us today in Antioch, California for all of your insurance needs.

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