Owning a second home or multiple homes can be a great luxury. But, whether the properties are non-owner occupied (rented) or vacant, REO insurance is a necessity for one’s investment properties and the process of insuring these homes can introduce many challenges. Never assume your primary homeowner’s insurance policy will allow for additional homes, generally it won’t. There are usually vacancy clauses in the homeowner’s policy. An investor can navigate the choppy waters of owning multiple properties by following these survival tips.
Risks of Insuring Multiple Homes
One of the threats to owning several homes is when one or more become vacant. Vacant homes can go downhill quickly. When an investor’s homes are vacant, it’s a common mistake to assume that less insurance coverage is needed. But just because the owner isn’t there doesn’t mean the home won’t have a water leak, an electrical fire, or get burglarized. These are risks an investor takes when leaving a home vacant, making it important the properties are properly insured.
Have Plenty of Coverage
Insurance can be an investor’s best friend when dealing with property management. This is especially true if properties are rentals. Real Estate Investors should have both property and liability coverage in the event of an accident.
Umbrella coverage as secondary liability insurance should be considered as additional protection from a potential lawsuit. Sometimes a lawsuit can exceed a standard homeowner’s policy putting assets at risk.
Don’t Go with the Least Expensive Plan
One of the biggest mistakes an investor can make is obtaining the least expensive REO insurance policy. Finding the right value can be difficult. It’s very helpful to work with a skilled insurance agent to ensure who knows the nuances of owning multiple properties. A knowledgeable agent will help ensure that an investor purchases the best coverage at the best price. Following these tips will alleviate stress and potential excessive loss.
APIA has been providing property owners with real estate property management insurance coverage since 2001. We understand owning multiple homes can be stressful, contact us to get the coverage you need.
