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Insurance for Real Estate Investors

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What Kind of Insurance do you need as a Real Estate Investor and other Insurance Help to protect your real estate investment

As a real estate investor, you have specialized needs when it comes to insuring investment properties. You may have multiple properties, some of which may be vacant. And those properties may be titled in the name of an individual, an LLC, a corporation, or a land trust. Insurance for real estate investors is different than insurance for home owners. You may have questions about which type of policy to buy, and what it covers.

L & M Insurance Group has extensive experience helping real estate investors with their unique insurance needs. On March 3, L & M’s president, Mark Holley, along with colleague Larry Johnson, made a presentation to the general meeting of the Suncoast Real Estate Investors Association (SREIA) covering several points of interest to real estate investors. Here is some key information from the presentation:

DP3 vs. DP1 policies

The DP3 and DP1 policies are two types of tenant-occupied policies that real estate investors should consider. Typically, the DP1 form only covers named perils that are listed on the policy, including fire, smoke, wind, hail, lightning, explosion, and so on. DP3 policies cover all perils except those that are specifically excluded in the policy documents. Basically, the DP3 form is for property owners who want a tenant-occupied policy with all the bells and whistles. If you need to save money, or are interested in assuming more risk yourself, choose the DP1 form. Be sure to talk to your agent about what is included and what isn’t, so you can get the policy you need.

Builder’s risk vs. vacant dwelling

Builder’s risk provides insurance coverage for either residential or commercial buildings under construction or renovation. Vacant dwelling covers a dwelling that is unoccupied.

One thing to remember is that the liability coverage included on a builder’s risk policy doesn’t cover exposure to claims related to renovation, so the people you hire should carry general liability and list you on their policy as an additional insured.

4 point inspections and wind mitigation reports

If you own a home or rental property older than 30-40 years, a homeowners company may require a 4 point inspection before they’ll sell you a policy. A 4 point inspection looks at the four main systems of the property: the roof, the plumbing system, the HVAC system, and the electrical system. These inspections generally cost between $75-$100, and are good for three years. If the inspection reveals something unacceptable to the underwriting rules of the insurance company, they may decline to cover you. You may then choose to fix the problem(s), or try another insurance company. Your independent L & M Insurance Group agent can help you determine which company will be most likely to cover your property.

Even if the insurance company will write the policy, certain things will cause premiums to be higher, including aluminum wiring, an old or patched roof, and plumbing or heating/cooling systems that have not been kept updated.

Wind mitigation reports tell us about your roof, and what credits can be applied to your policy. The inspector will examine and report on your roof’s covering, roof deck and roof wall attachment, roof geometry (hip, flat, or other), secondary water resistance, and opening protection.

In addition to certain physical features that cause your premiums to be higher, certain situations may also increase the cost of your insurance. These include lapses in coverage, short-term rentals, and property being held in a land trust or a land trust with multiple entities.

Our partnership with you

L & M Insurance Group’s goal is to write your real estate investment insurance policy for the best price with a company that will pay your claim if you have one. That’s one of the reasons we need full and accurate information about your properties when we’re quoting your policy. You can help us by answering our questions truthfully and fully. We have markets that will write almost any kind of situation, but we need to know certain details in order to place your policy with a company that is right for you.

Have questions? Please give us a call at 813-672-4100, and let L & M Insurance Group help you protect your real estate investments. 

Are you sheltering in place due to the COVID-19 coronavirus? We can serve your insurance needs without seeing you in person! Please call us at 813-672-4100 or email us by clicking here if you need an insurance quote, have to make a claim, or have any questions about your insurance needs. We also have a live chat feature on our website.

Our office is temporarily closed to the public in order for us to follow social distancing guidelines and protect the health of our employees and customers. If you need to make a cash payment, please call our office at 813-672-4100 for instructions.

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Business Owner Policy (BOP) Basics

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If you’re starting a small business, you have many decisions to make—including what sort of insurance coverage your new business needs to safeguard your assets and income. Don’t worry—at L & M Insurance Group, we’re here to help!

 

Let us introduce you to the insurance package with the catchy name “BOP”—which stands for Business Owner’s Policy. A BOP combines property and liability insurance into one policy, and can protect your business from the most common risks, such as fire, theft, lawsuits, or even the loss of income associated with an interruption to your business. It’s a convenient—and cost effective—way to protect your business.

 

You can also add additional coverages (see below) to customize insurance coverage for your particular needs. BOPs are great for any small to medium-sized business (100 employees or fewer) with a storefront and any business personal property.

 

Typically, a BOP includes:

Property insurance—protects the physical location of your business, whether you own or rent. Also provides coverage for your inventory, customer data, equipment, furnishings, and records and documents.

Liability insurance—provides coverage if you’re sued for an injury or property damage, even if you did nothing wrong. Also protects you from lawsuits if you injure someone’s reputation or infringe on someone’s copyright.

Business interruption insurance—provides coverage to replace lost income if you’re unable to do business due to a covered loss. It may also contain coverage for the expense of having to operate out of a temporary location.

 

Depending on your business, you may also need additional coverages not contained in a BOP—such as Worker’s Compensation, Professional Liability (Errors and Omissions), Data Breach, or Commercial Auto. (We can help you with those, too—just give us a call.)

 

Every business is different and has different needs. Let your L & M Insurance Group insurance specialist help you with your business insurance needs. We’ve been serving Riverview and surrounding communities for more than 10 years, and we’re here to help. Please call us at 813-672-4100, or contact us online.

Improving Your Home? Don’t Forget to Upgrade Your Insurance

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Home Owner's Insurance: Reasons to UpgradeSpring weather has many of us thinking about home and landscape improvements. It’s a perfect time of year to spruce up our surroundings, and prepare for the coming heat, humidity, and summer storms.

 

If you’re planning renovations or landscaping projects this spring, consider what effect these projects might have on your homeowners insurance and liability. Some projects can make your home safer (thus reducing the chance you’ll have to make a claim on your insurance), some projects will increase the value of your home (so your current homeowners policy might not be adequate), and some projects might even save you money on your insurance.

 

Here are five common home improvement projects and how they can affect your insurance coverage:

 

Tree Trimming

Trimming trees not only improves their health and appearance, it can also make your home and yard safer. Proper trimming ensures that dead limbs can’t fall on your car, or be blown into your yard by high winds. You can also protect your roof and pool enclosure by having overhanging limbs cut back. This reduces the likelihood that your home or car—or a guest’s car—will be damaged by falling tree limbs.

 

Planting Trees or Shrubs

Before planting anything with invasive roots, find out where your water, sewer or septic lines run. Most homeowners insurance policies don’t contain coverage for water or sewer back-up damage—damage that might be caused by roots that grow into your water, sewer, or septic lines. One way to find out where those lines are is to “call before you dig”.

 

Roof Replacement

Even though it can be an expensive home improvement, having your roof replaced can offer you peace of mind, increase the value of your home, and save you money on your homeowners insurance. (See “A Wind Mitigation Report Can Lower Your Homeowners Insurance Premium” for more information.)

 

Adding a Pool

Having a pool in Florida is almost a must—but it can leave you open to liability claims if someone is hurt while playing in or around your pool. You may want to consider adding an umbrella policy to boost your liability protection. Also, remember to increase the amount of your homeowners coverage to include the value of that new pool. And think twice about adding a slide or a diving board. Most homeowners policies exclude exposure to slides or diving boards. Some only provide $25,000 worth of coverage, and others won’t write your policy at all if you have a slide or diving board.

 

Significant Kitchen or Bath Upgrades

Installing granite or marble countertops, custom cabinetry, or professional-grade appliances? You may want to upgrade your homeowners insurance coverage at the same time, to be sure you’d receive the increased value should you have to make a claim. If the remodeling is extensive, you may need to buy a builder’s risk policy.

 

It’s a great time of year to spruce up your Florida home. Please call us with any questions you have about how your proposed home or landscaping projects might affect your insurance.

Protect Your Assets With an Umbrella Policy

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Umbrella Policy Brandon FloridaIt only takes a moment for an accident to happen and for your life to change. In today’s litigious world, if you’re responsible for an accident, you could find yourself being sued and your auto or homeowners policy limits aren’t sufficient to meet the damages. For that reason, we recommend that you carry an umbrella policy.

An umbrella policy is excess liability coverage over and above your other insurance, such as your auto or homeowners policies. Umbrella policies will protect your assets—including your home, retirement accounts, savings, investments, and your future earnings—from being taken in a lawsuit. Policies start at $1 million dollars of liability coverage and climb in $1 million dollar increments from there. The goal is to have enough coverage to protect your net worth. (You’ll want to discuss the amount of coverage you need with your L & M Insurance Group agent.)

Protecting your assets

Here’s how an umbrella policy works: Let’s say you were judged to be liable in an auto accident, and your auto insurance carries a liability limit of $300,000. Unfortunately, the judgment against you comes down at one million dollars. If you have an umbrella policy, it should pay the remaining $700,000. If you don’t have one, any savings or assets you have will be at risk, you could have a lien placed on your home, or your wages garnished to make up the difference.

There are many scenarios in which you could find yourself needing an umbrella policy. What if a passenger in your car is injured, you hit a cyclist, or someone trips and falls on your property and is hurt? Do you have teenagers in your household? Do you have a swimming pool, or a trampoline? These items are responsible for many insurance claims. Owning rental property also raises your liability exposure.

Can you afford an umbrella policy?

The good news is that umbrella policies are affordable, with most running just a few hundred dollars a year—a small price to pay when you consider your peace of mind.

Without an umbrella policy, your assets are vulnerable. Accidents do happen, and it makes good financial sense to protect yourself with an umbrella policy. Please contact L & M Insurance Group today, and let us help you find the policy that is right for you.

Shopping for Homeowners Insurance? Don’t Cut Corners!

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Your home is your most valuable asset, and you want to be sure you’re covered financially if it’s damaged or destroyed. When shopping for homeowners insurance, make sure your policy’s coverages and limits are adequate and appropriate for your situation. We’ve noticed that some agents cut corners on coverage just to sell you a policy, without regard for what you really need.

Homeowners Insurance Brandon Florida

When you call for a homeowners quote, here are six questions you should ask:

Will my home and belongings be covered for replacement cost or actual cash value?

Actual cash value is the cost to repair your home or replace your belongings, less a deduction for a decrease in value due to age, wear and tear, and other factors. Replacement cost is the actual cost to repair or replace your property with items of equivalent quality and kind at current market value. For example, if you have a kitchen fire that destroys your appliances, with replacement cost, you’ll receive enough money to buy new appliances. If you have actual cash value, you’ll receive a lesser amount due to the depreciation of your destroyed items. Replacement cost usually costs a little more than actual cash value, but we think it’s well worth the investment.

Does this policy cover water back up?

A standard homeowners policy usually covers damage from overflow of water from plumbing, heating, or air conditioning as long as it originates on your property. However, if the back up damage comes from outside of your property, such as if heavy rains cause a sewer back up into your home, you may not be covered. This is a scenario all too common in our hurricane-prone state. (Please note: water back up coverage is NOT the same as flood insurance.)

How much is my home insured for?

Make sure the policy you’re being quoted is for the full replacement cost of your home—not the property’s market value or the amount you paid for the property. We’re seeing quotes from other agents where the home’s structure is severely under insured, which could lead to future claims only being partially paid, or if you have a total loss, leaving you without enough to rebuild.

What are the liability limits of this policy?

Liability protects you from lawsuits for injury or property damage you do to someone else. Most homeowners policies carry a minimum of $100,00 worth of liability insurance, but many insurance experts feel this is inadequate, and recommend coverage of at least $300,000 to $500,000. The price difference of raising your limits can be as low as $20 a year.

How much coverage is there for my home’s contents?

Most homeowners policies cover your personal belongings at a percentage (usually 50-70%) of the amount your dwelling is insured for. So if your home is insured for $200,00, and your policy covers contents at 50%, your contents are insured for $100,000 if there is a total loss. Some agents may try quoting 25% coverage or even no contents coverage at all to bring the policy’s price down, but you don’t want to risk this.

Does this policy have a hurricane deductible or a wind/hail deductible and how much is it?

Storms occur frequently in Florida, so always ask what deductible you have for a hurricane loss. If it is a percentage, ask what that equates to in dollars so you’ll know your out-of-pocket cost in the event of a hurricane loss. If possible, you want to avoid the broader “wind/hail” deductible since most storms that could damage your home are not hurricanes.

Homeowners insurance in Florida is not cheap, and while you don’t want to pay too much for a policy, don’t make the mistake of underinsuring your most valuable asset. Beware of agents who quote you a low rate just to get your business rather than watching out for your best interests. At L&M Insurance, we have years of experience in the Florida homeowners insurance market, and we will do our best to serve you. Please contact us today for a free quote, or if you have any questions about your homeowners policy.