Insurance Curator Landlords and rental property owners face unique liability exposures—tenant injuries, property damage, lawsuits over habitability, and third-party claims arising from business operations (short-term rentals, property management). An umbrella or excess liability policy can protect rental property owners from catastrophic judgments that exceed underlying policy limits. This guide — focused on the United States (with notes for major markets like California, Florida, New York, Texas, and Illinois) — explains what landlord umbrella coverage does, how much it costs, top carriers, and how to choose the right limits.
What is umbrella (and excess) insurance for landlords?
- Umbrella insurance provides additional liability limits above your underlying policies (homeowner/landlord insurance, auto, watercraft). It pays for damages, legal defense, and judgments once the underlying limits are exhausted.
- Commercial umbrella or excess liability covers business-related exposures tied to rental operations (multiple units, commercial rental, short-term rentals, property management businesses). This is typically required for landlords with multiple properties or higher-risk exposures.
Insurance Information Institute (III) and industry sources report that personal umbrella policies start at roughly $150–$300 per year for $1 million of coverage for typical personal exposures; commercial/landlord umbrellas cost more depending on scale and risk. See III and Policygenius for general cost guidance:
- Insurance Information Institute: https://www.iii.org/article/what-is-umbrella-insurance
- Policygenius: https://www.policygenius.com/insurance/umbrella-insurance/cost/
Why landlords need umbrella/excess liability
- Tenant injuries (slips/trips, stair falls)
- Premises liability (inadequate lighting, unsafe walkways)
- Damage from rental operations (contractor work, appliance failures)
- Tenant lawsuits for discrimination, wrongful eviction, or habitability
- Third-party auto claims if you own company vehicles used for property maintenance
High-risk U.S. locations increase liability frequency/severity:
- Florida (hurricane-related injuries, frequent slip-and-fall claims in vacation rentals)
- California (landlord-tenant litigation, wildfire exposure in rural properties)
- New York City (high-density claims, elevated legal fees)
- Houston/Dallas (large multi-family portfolios, construction defects)
- Chicago (older building risks, tenant litigation)
Types of umbrella/excess policies for landlords
- Personal Umbrella: Extends liability above a single-family owner-occupied or landlord homeowners policy. Not ideal for commercial rental portfolios.
- Commercial Umbrella: Designed for landlords with multiple rental properties, apartment buildings, or short-term rental businesses. Can be written in $1M increments over underlying commercial general liability (CGL) and other policies.
- Excess Liability: Often similar to a commercial umbrella but can be “follow form” excess over specific underlying policies or “stand-alone” excess with its own conditions.
For small landlords with a single rental property, a personal umbrella (if the insurer allows adding the rental as an insured location) may suffice. Larger portfolios require a commercial umbrella/excess liability.
How much umbrella coverage do landlords need?
A common rule: buy enough limits to cover a worst-case judgment plus attorney fees and interest. Consider:
- Typical starting point: $1M–$2M for part-time landlords or single-property owners.
- Recommended for multi-property landlords or higher-exposure markets: $5M–$10M or more.
- High-net-worth owners, operators of short-term rentals, or owners of large multi-family buildings often purchase $10M–$50M of excess coverage through markets like Chubb, AIG, or specialty excess carriers.
Example calculation:
- Underlying landlord liability limit: $300,000
- Potential catastrophic judgment for a fatal injury case: $3,000,000
- Recommended excess needed: at least $2.7M — round up to a $5M umbrella for margin and legal costs.
Use decision tools and calculators to estimate needs; see our guide: Best Insurance For Umbrella to Find the Right Limit: Calculators and Decision Guides.
Cost estimates and company comparisons (U.S. market)
Costs vary widely by location, claim history, property type, and the insurer. Below is a practical comparison with typical market ranges (figures are representative; get quotes for exact pricing). Sources: Policygenius, Insureon, and market filings.
| Provider | Best for | Typical cost for $1M personal umbrella | Typical commercial/landlord $1M excess cost (annual estimate) |
|---|---|---|---|
| State Farm | Large agent network, bundled discounts | $150–$300/year (personal) | Often offers commercial umbrella via agents; $500–$1,200+ depending on exposures |
| Allstate | Nationwide personal umbrella availability | $150–$350/year (personal) | Commercial umbrella available through agents; $600–$1,500+ |
| Progressive | Good for landlords who bundle auto/property | $200–$350/year (personal) | Commercial excess via partner carriers; $700–$2,000+ |
| Chubb | High-net-worth and complex portfolios | $500+ for high-limit personal | Specialty excess with broader coverage; $1,500–$10,000+ depending on limits |
| AIG / Berkshire Hathaway Specialty | Commercial and large rental portfolios | Not typically personal-first | $1,000–$10,000+ (commercial excess for large portfolios) |
Notes:
- Personal umbrella prices ($150–$350) are typical base ranges for $1M, per Policygenius and III; landlord commercial excess typically starts higher due to underwriting complexity (source: Insureon — https://www.insureon.com/business-insurance/umbrella).
- High-risk states (FL, CA, NY) and short-term rental operations increase premiums significantly.
External resources for rates and products:
- Policygenius umbrella cost guide: https://www.policygenius.com/insurance/umbrella-insurance/cost/
- Insureon commercial umbrella overview: https://www.insureon.com/business-insurance/umbrella
Underlying limits and common requirements
Most umbrella carriers require specific minimum underlying liability limits before issuing umbrella/excess coverage. Typical requirements:
- Auto liability: $300,000–$500,000 (sometimes $500k per occurrence)
- Commercial general liability (CGL): $1M per occurrence / $2M aggregate or higher
- Employer’s liability (if you have employees): $500,000–$1M
Failure to meet these underlying limits can result in the umbrella denying coverage for gaps. Verify required underlying limits with prospective carriers.
Key exclusions and endorsements to watch for
- Professional liability (E&O) — not covered unless a specific endorsement is added.
- Business activities beyond typical property management — might need separate commercial policies.
- Intentional acts, contractual liability, pollution — can be excluded; consider endorsements or separate policies.
- Short-term rental exposures — some carriers exclude short-term rentals or require special underwriting.
See our article on umbrella vs excess liability for deeper differences and use cases: Best Insurance For Umbrella vs Excess Liability: Key Differences and Use Cases.
How to buy the right umbrella for rental properties
- Inventory all properties and exposures (number of units, short-term rentals, pools, elevators, employee usage).
- Review current underlying limits on landlord and auto policies.
- Get multiple quotes — agents and specialty brokers often access commercial excess markets.
- Consider higher limits if you operate in high-liability jurisdictions (FL, CA, NY, TX, IL) or host short-term rentals.
- Ask about stacking options and whether an umbrella can follow over multiple underlying policies: Best Insurance For Umbrella to Stack Over Multiple Underlying Policies: Auto, Home and Boat.
Final considerations
- For single-property landlords in low-risk areas, a $1M–$2M umbrella may be cost-effective.
- For multi-property owners, short-term rental operators, or landlords in high-risk states (Florida, California, New York, Texas, Illinois), plan on $5M+ in excess coverage and expect higher premiums.
- Work with an independent agent or a commercial broker experienced in landlord/real estate exposures; carriers like Chubb, AIG, and specialty markets are common for high limits, while State Farm, Allstate, and Progressive often provide competitive personal umbrellas for smaller landlords.
Additional reading for related decision-making:
- Best Insurance For Umbrella Coverage: Do You Need Extra Liability Protection and How Much?
- Best Insurance For Excess Liability: When to Buy an Umbrella vs Increasing Underlying Limits
Sources
- Insurance Information Institute — What is umbrella insurance: https://www.iii.org/article/what-is-umbrella-insurance
- Policygenius — Umbrella insurance cost guide: https://www.policygenius.com/insurance/umbrella-insurance/cost/
- Insureon — Business (commercial) umbrella overview: https://www.insureon.com/business-insurance/umbrella
If you manage multiple rentals or operate in high-liability markets, prioritize a tailored commercial umbrella quote — underwriting nuances (tenant screening, maintenance programs, contract transfers) materially affect pricing and coverage.