Should You Buy Umbrella Insurance? - YouTube

Hi, Mark, Kohler here with the 2-minute tip talking about umbrella insurance now

I want to put this in the context of a rental property and I know for some of you and in

Expensive states where an LLC can be costly ie california, Illinois you might be thinking I'll just buy insurance

I'll be covered well

Not so fast tiger. Let's talk about it now number one

Umbrella insurance makes sense I think umbrella insurance is a great insurance strategy for everybody even if you don't own rental property

It'd be extremely affordable and it

provides extra protection in case of a claim from somebody that wants to sue you or an accident that could occur so

Don't think that I'm saying insurance is bad and that all you need to do is legal protection and avoid insurance

Conversely anybody out there that sane just buy insurance and don't do legal not to wise either so first and foremost

Look at umbrella insurance, and make sure it's a part of your plan number two. Let's talk about some realities here however

umbrella Insurance is Excess insurance

Meaning once your regular insurance is used up

Then umbrella steps in it doesn't cover you in case your regular insurance doesn't do it it only covers you

After your regular insurance runs out of its policy limits a lot of people think oh

Umbrella insurance will just cover everything no no no again. It only steps in for the excess liability

That's why it's so cheap number three related to excess insurance is

The fact that you have to have valid insurance in place in the first place or Abro insurance won't kick in

for example if you have a homeowner's policy

and there's someone that gets hurt at your property maybe in the swimming pool and

Heaven Forbid there's a claim that's in excess of your policy limit

Then umbrella insurance kicks in but if you don't have valid homeowner's insurance it won't

now let's put this in the context of a rental property you have to have a landlord policy for your rental property and then

Umbrella insurance will kick in but if you don't have that landlord policy

Watch out Dan umbrella policy could be worthless number four keep in mind that most umbrella policies are

personal umbrella policies they cover that uninsured motorist

Maybe you have a teenage driver your homeowners and that sort of thing sometimes

They don't realize you may have a rental property and you just think your rental properties are going to be covered with your personal umbrella

Be careful make sure you talk to your insurance agent before making that assumption

Some umbrella policies won't cover rental properties some do some only cover up to two to three rental properties

So then you're forced to get a commercial umbrella policy

I personally have a commercial umbrella policy over my rental properties, and then I have a personal umbrella over personal liability and again

They're very affordable because their excess policies on top of your regular insurance anyway

but again

Don't make the assumption that your personal umbrella is going to just cover everything including your rentals in some again

Insurance is an important part of a good asset protection plan as well as legal planning and getting an lLC for your rental problem

It's combination of both

It's balanced so don't avoid llc's for insurance and don't avoid insurance because you have an LLc

Find a good balance of both and don't overdo it

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