I’ve found that a lot of landlords — especially new ones — don’t seem to get the right type of insurance, let alone high enough limits.
Renting is Risky
Landlords are usually underinsured with a basic dwelling/fire/landlord policy. This really isn’t enough coverage when a major claim occurs since the liability limits are normally capped at $500K and some claims can run into the millions.
All you have to do is search “landlord nightmares” and you’ll get an idea of what could be at stake.
The basic policy may leave a major gap and a landlord’s personal assets could be fair game.
A Smart Option to Consider
Think about recommending a personal umbrella policy in addition to the underlying to protect their investment and personal financial assets. Umbrella policies have higher liability limits (some up to $15MM) and won’t break the bank with premiums.
Even better, most include specialized legal defense.
A standalone personal umbrella works well for agents who might not control all of the insured’s underlying policies; it’s an “a la carte” option when you’re not the agent of record.
For Landlords Who Aren’t People
If your insured is renting their property as a DBA or LLC, you may be able to add that entity as an additional covered person — this is a unique offering so be sure to check with your umbrella carrier.
An umbrella can be a lifesaver for landlords of all types. Now only if it could unclog that sink, too.