Landlord Policy - how much to insure for a rental?

[foostache]

Hi there,

First time post from a long-time lurker hoping the wisdom of this forum can guide me.

How do you determine how much to insure a rental for in terms of liability, medical, etc?  I recently inherited a duplex and am reviewing the landlord policy in place.  The liability on this policy is less than the actual fair market value of the duplex.  Not sure why, but I thought liability should be close to what your assets are worth, and following that logic, at least as much as the fair market value of the duplex.  Since that's not the case here I'm wondering if the property is properly insured or under-insured and not sure what factors are used to determine that.

I'm also considering moving into one side of the duplex when the lease for my apartment is up.  If I do, would I need a different type of policy for the duplex or should I still have a landlord policy?

Thanks in advance for your help!

[Drifterrider]

If you are renting you should have a landlord's policy.  Your insurance agent can explain the differences between that and a standard home owner's policy. 

[electriceagle]

I would not consider owning a rental property with less than $1MM in liability coverage.

"Medical payments" coverage covers cases where you are not at fault. It exists mostly as a way for an insurer to pay nuisance claims without a court case. Don't worry about it.

[zephyr911]

This is kind of a tangent, but when I got into real estate seriously, I got a $1M personal umbrella policy in addition to my landlord policies. It's less than $20/mo.

[YoungRetire]

The main difference between a landlords policy and a home owners of that the rental policy is a lot cheaper because your not insuring the contents inside the house because they are not the landlords couches and other stuff

[Jon Bon]

I second the umbrella policy. I have 1million and it's about 200 a year. I of course expense this and it helps me sleep at night!

I'll probably go to 2 million actually. *emails insurance agent*

[jnc]

Re the umbrella policy, can anyone recommend an insurer that will provide an umbrella policy that will cover rentals that are in different states? I'm currently in CA, GA and TN.

[zephyr911]

Re the umbrella policy, can anyone recommend an insurer that will provide an umbrella policy that will cover rentals that are in different states? I'm currently in CA, GA and TN.

Umbrella covers you personally. It's not directly tied to any property, it just covers liability claims against you as a person.

[mokosai]

All umbrella policies that I've seen require everything you have to be insured with the same insurer (personal home, rental property, car, etc.). In my case, for whatever reason, it's cheaper to have one company insure the rental property and another my own home, car, etc.  So, I instead have $1M of coverage for each rental property on that policy. The cost for $1M of liability instead of $300k is something like $25/year (per property).