LLC or high insurance policy limit for self-managed property?

[Yuke]

What is the name of your state? CA

I would like some opinions regarding insurance for a self-managed,single unit rental property.

Option One: Form an LLC and assign the property to the LLC. Contracts with tenants would be with the LLC.

Issue- self-management of the property would likely expose the LLC owner personal liability for any tort or contract based lawsuits by a renter.

Cost: $800/year

Option Two: Purchase a $2 million insurance policy for $600/year.

Thanks in advance.

 

[seniorjudge]

What is the name of your state? CA

I would like some opinions regarding insurance for a self-managed,single unit rental property.

Option One: Form an LLC and assign the property to the LLC. Contracts with tenants would be with the LLC.

Issue- self-management of the property would likely expose the LLC owner personal liability for any tort or contract based lawsuits by a renter.

Cost: $800/year

Option Two: Purchase a $2 million insurance policy for $600/year.

Thanks in advance.

Get as much liability insurance as you can afford.

 

[Yuke]

Get as much liability insurance as you can afford.

Thanks for the response. So is my conclusion that forming an LLC will likely not afford me any asset protection because I am personally managing the property?

 

[seniorjudge]

Thanks for the response. So is my conclusion that forming an LLC will likely not afford me any asset protection because I am personally managing the property?

Google

california pierce corporate veil

Read some of the articles. It will be an eye-opener.

Now...would you rather have INSURANCE or depend on some legal principle that the judge may or may not know about, much less agree with?

 

[divgradcurl]

What is the name of your state? CA

I would like some opinions regarding insurance for a self-managed,single unit rental property.

Option One: Form an LLC and assign the property to the LLC. Contracts with tenants would be with the LLC.

Issue- self-management of the property would likely expose the LLC owner personal liability for any tort or contract based lawsuits by a renter.

Cost: $800/year

Option Two: Purchase a $2 million insurance policy for $600/year.

Thanks in advance.

Create the LLC AND get insurance. That's probably the best choice.

 

[lwpat]

Create the LLC AND get insurance. That's probably the best choice.

I agree. You need the insurance either way.

 

[Yuke]

.

The issue is that if I form the LLC, can I be still sued as an officer of the corporation where I would be personally liable because I am self managing the property?

 

[wdlsguy]

Exceptions to Limited Liability

I am not a lawyer

 

[divgradcurl]

That's a good link to some good information that should answer your questions.