Question About Insurance

Hi-



I talked to my insurance agent today. I have 1M liability on the rentals and 50K auto insurance. He says that I need to bump up the auto insurance to 300K. He says that if I caused a accident and I got sued that they will go after my properties and that 300K more auto insurance would protect me more. Is this good advice?

Comments(5)

  • NewKidInTown319th March, 2009

    I think it is reasonable advice. I think there is a higher probability that you will be involved in a lawsuit steming from an auto accident than from one of your tenants.

    After you increase the auto coverage to $300K, ask your insurance agent to quote you a $1 million to $2 million umbrella liability policy.

    The idea here is that if the judgment from your auto accident happens to be greater than $500K, the umbrella policy will further protect your assets up to another million or two.

  • d_random20th March, 2009

    Thanks Newkid-

    Do I need an umbrella if I already have 1M liability on the rentals? Are you saying that I need 2 or 3 million on the rentals?

  • smithj220th March, 2009

    d_random,

    The cost per thousand for liability is cheaper on an umbrella policy than on a fire policy. Is there a particular reason you have such a high liability as part of your rental policy? And when you say you have $1M on your rentals, does this mean you have one policy covering all your rentals or do you have individual policies with $1M on each?

    if you do have one blanket policy, do you find that less expensive? I tried to go blanket with my rentals but found the cost per thousand increased by over 50%. Apart from convenience, what is the benefit of the blanket policy?

    JS.

  • d_random23rd March, 2009

    smithj2-

    I am not knowledgeable enough about the insurance to give you a good answer. I have a liability policy that covers three rentals (one is my personal residence). 1M for all three.

  • cjmazur25th March, 2009

    Do you cross name all the other properties as insured on the other policies?

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