Insurance for Investment Properties: Get it Right!
This is THE MOST forgotten about thing for real estate investors.
You would think that insuring a property would be the most important thing real estate investors do but it’s usually the last thing they think about.
Don’t wait until the last minute before you’re closing on a property to consider the insurance.
Here are some tips for making sure your property is insured properly
- Get the right type of insurance for your specific investment property., e.g. vacant dwelling versus landlord/tenant
- Dwelling Replacement Coverage: Don’t cheap out, make sure your coverage is adequate. If the cost to build the home new in your market is $250 per square foot, make sure you insure your property at $250 per square foot. If there’s a loss you won’t be able to rebuild the property because the dwelling replacement coverage is not enough to rebuild the property.
- Rehab? Make sure your policy has builder’s risk and liability to protect your improvements and protect you from liability if someone is hurt on the job site.
- Addtl Coverage: Is your area prone to flooding or earthquakes and does your insurance policy cover those?
This is your life savings in most cases that you’re putting into these properties. If anything your properties should be OVERinsured and not underinsured.
Don’t fall short on your insurance!