How much insurance do I need?
There’s insurance for fire, renters, pets, liability, earthquake, catastrophic, hurricane, flood, hail and umbrella coverage. WOW…where do I begin and how can I sift through all the terms and different types of insurance?
A good place to start would be a broker. Insurance brokers, like real estate brokers, specialize in different types of insurance whether it be home, fire or auto. They all have different companies they represent, some represent multi lines of insurance (different carriers) and some are specific to the brand they represent (ie: USAA, Allstate, etc.).
As an investor in rental property, whether it be multi family or a single family home, insurance is an absolute must to protect your investment.
When a home becomes a rental, you will need contact your Insurance agent and have a rental (fire policy) put into place. Fire policies are different from a typical homeowner’s policy; the fire policy insures just the structure based upon limits set by your insurance agent and possibly your mortgage company. Some policies also cover lost rent and cover debris removal after a fire or major incident.
When you live in a home you cover all of your personal items and the home from all forms of claims. You may also have added personal liability coverage; your insurance agent will make recommendations.
Policy limits (amount of insurance) can be determined and are based upon several different factors. Some are based on the value of the property you are insuring and may use other economic factors such as lost rent, replacement cost vs repair or rebuild.
The professional insurance agent is a good place to ask questions and make certain you are protected from the unexpected.