Insurance can seem like a boring subject for landlords and investors in real estate. If your property is not adequately insured, or if liability coverage is missing from your policy, you could find yourself in a financial disaster.
With an appropriate insurance policy in place, you can protect yourself against losses, both big and small. And while it is always important to consult with an insurance professional to discuss your specific needs, it is wise to fine-tune your quote to your exact specs to cover your unique property and/or situation. Is your property in a flood-zone? This type of property may have a unique set of insurance requirements compared to others.
Being over-insured or underinsured, or carrying the wrong types of coverage, on an investment property can lead to detrimental results.
The Type of Insurance Policy All Real Estate Investors and Landlords NEED:
Property Insurance – You need to cover your financial investment, and a property insurance coverage will protect your property in the case of fire, storm, etc.
Liability Insurance – Whether occupied or vacant, every landlord or real estate investor needs to protect themselves from a third-party claim such as slip-and-fall.
Flood Insurance – While some may believe this is only needed required and for those with a property is in a designated flood zone, water damage after a flood can severely damage a property that is just near a disaster.
Builder’s Risk Insurance – If you purchase a vacant property and plan to renovate, builder’s risk insurance will be needed. A basic property or liability insurance policy will not cover damages while a property is under renovation. Read more here.
Loss of Income – If a landlord or property investor rents or leases space out to tenants, loss of income insurance, sometimes referred to as business income insurance, may be one of the best ways to protect yourself. Property investors who “flip” a property and intend on reselling usually don’t need this type of insurance.
Insurance doesn’t have to be complicated. It’s amazing what a few minutes on the phone with a trusted commercial insurance agent can accomplish. Call our office at (708) 233-4848 for more information, or for a commercial insurance quote.