Roberts Insurance Group Blog
Insurance for Real Estate Investors- Residential, Commercial, Landlords, Fixers, Flippers, Developers and Builders
Becoming a real estate investor is a great way to earn a living and grow your wealth. Some investors focus on rental properties and passive income. Some focus on fix and flips. Some focus on residential and others on commercial properties. And some do a little bit of everything!
Whatever your focus is as a real estate investor, you want to make sure your income and assets are properly protected. The last thing a successful investor wants is to lose the assets and income they have worked so hard to build. This is why it is crucial for investors to work with an independent insurance broker to ensure they have the right type of policy or package for their situation.
Some things to consider:
The type of policy you have matters
A long term rental property is going to be on a different type of policy versus a fix and flip. Fix and flip policies are going to cover properties while they are vacant, while a long term rental property policy will not. New construction policies, like a Builder’s Risk, will be totally different than other types of investment property insurance. In addition, long term rental properties are going to be covered differently than short term rentals like Air BnB’s. You need to work with your broker to make sure they have all of the facts and have your property and investment properly covered.
The only thing worse than having no insurance is having the wrong insurance. Having the wrong type of insurance means that you’ve paid premiums only to have your claims denied!
Something else to note is that commercial properties will need to be on a totally different policy form versus residential. To add to this, some companies will transition your residential rental portfolio to a commercial account once you have a certain number of properties. This differs from company to company.
Having loss of rental income and adequate liability coverage is crucial
Loss of rental income will pay your lost income while your property is being fixed or renovated due to a covered claim, which is very important to make sure your bottom line is in-tact.
Having the proper amount of liability coverage is crucial to ensuring your income and assets are protected if you or your business is involved in a lawsuit. Consult with your attorney or CPA on how much your business needs, but generally speaking you’ll want to make sure you have enough to cover all of your assets. In the state of Georgia, losing a lawsuit means that you’re subject to wage garnishment and/or asset seizure if necessary. Getting a large amount of liability insurance is very affordable and can be purchased for pennies on the dollar. In most cases, it will be with a combination of your property policy’s underlying limits plus an umbrella policy.
Lastly, you need to make sure that you aren't over-paying for your insurance. As an investor, your bottom line is all that really matters. Your profit margins can be diminished quickly if you aren't careful. This is why it is important to work with an independent insurance broker who can evaluate your coverage with several different companies to make sure that you’re getting the right coverage at the best price.
At the Roberts Insurance Group we specialize in working with all types of real estate investors. If you’d like to see how we can help your portfolio and bottom line give us a call at 678-250-8133 or click here!