Do You Need Umbrella Insurance For Rental Properties?

Umbrella insurance is a good idea for many people but can especially be a good idea for the owner of rental properties. Your umbrella coverage will serve to supplement your landlord insurance and help to pay for any damages above the coverage limits of the landlord policy.

Why Get Umbrella Insurance for Rental Properties

Umbrella insurance is a good investment for owners of rental properties because you never know what might happen to your property or its inhabitants. Landlord insurance will only cover your damages up to a certain limit specified in your policy. Umbrella insurance policies will add an additional $1 million or more to your coverage, taking over to help pay for covered expenses after the landlord insurance has reached its maximum.

Without umbrella coverage, if a tenant is awarded a settlement of $750,000, but your landlord insurance only covers $500,000, you will have to pay the rest out of pocket. 

What Umbrella Insurance Will Cover

Umbrella insurance policies for rental property will cover business and personal liability, injuries to a tenant due to the property, libel and slander, and legal defense costs. This coverage brings you added protection from the unknown.

Suppose a pipe leaks in your rental property and your tenant slips and sustains an injury as a result of that water hazard. Your umbrella coverage can help pay for their medical expenses. Someone who gets injured on your property can sue you, even if they are not tenants.

Items Not Covered By Umbrella

Your umbrella insurance policy will be able to cover you for a wide range of damages. This umbrella coverage will not cover everything, however.

Your policy will not pay for damages to your property. If you intentionally cause damages related to the property, your umbrella policy will not cover you. If the landlord sustains personal damages, these will not be covered. Remember, these policies are intended to protect you from the financial consequences of damages you cause, not pay for damages done to you.

Suppose you own your rental property or properties under an LLC. In that case, a personal umbrella insurance policy may not cover damages related to your business. You will instead want to purchase a business or commercial umbrella insurance policy.

Finding the right coverage to protect your business interests can be challenging. The experts at All Things Insurance are here to help you secure the policy you need so you can focus on what matters most. Call us today to learn more about umbrella insurance.