Whether it’s house flipping or property management, all branches of real estate investing have a common denominator, and that’s insurance. This begs the questions: Are you covered? Beyond that, do you know what needs coverage? What happens if you aren’t? Are you paying too much? What’s the best policy for your investor situation? The questions are endless – and even more complicated as an investor’s career evolves. For March, we bring you The Insurance Talk for with the experts at NREIG.
Let’s warm up with some basics on insurance for the real estate investor as summarized by Shawn Woedl, Senior VP of sales at National Real Estate Insurance Group, who will lead The Insurance Talk at our March meetup. Our goal at REBallers and NREIG is to make sure you know how to correctly insure your property, minimizing risk, and preventing you from overpaying for unnecessary coverage.
Not All Policies are Created Equal
There are major differences between the three property coverages of Basic, Broad and Special form coverage. Did you know that there could be up to a 30 percent DIFFERENCE between each of these? As an investor, you must really know your property and situation to determine how cheaper insurance corresponds with coverage exclusions. Sure, less expensive may seem attractive to the budget but is it worth it in the long run? In most cases, Special Form Coverage is the best choice, although also the most expensive. “All-risk” coverage affords protection when a loss surfaces associated with Mold and Fungus, Wear and Tear, Sewer and Drain Back-up, Earthquake, Flood and Intentional Tenant Damage. Read more on Basic Form and Broad Form coverage with Shawn here.
Learning to Reduce Property Insurance Costs
Not all investors are seasoned experts with insurance, and that’s okay. Your best bet is to work with an independent broker that knows the residential game and works with various insurance companies to allow thorough comparisons for the best coverage and quote. When deciding on insurance budgets, did you know that the higher your deductible the lower your premium? You can also zero in on deductible amounts for problem areas only, like a flood, tenant damage or mold if you know your property well enough.
If you have or plan on having multiple properties, rolling them up into one policy could be more cost-effective, so bring that up to your broker and ask about discounts. To learn more insider tips for saving that retain the REBaller status, read more from Shawn here.
A valuable tool that keeps investors covered and on track is REIGuard. This is REBaller-approved as it simplifies the complex workloads of the real estate investor by allowing them to easily insure their investments as they evolve. With just a monthly bill to cover after tailoring the right coverage for your portfolio, this product makes the REBaller life easier.
Get full coverage of your insurance knowledge March 12 with our monthly REBaller meetup!