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. One should never assume his primary homeowner’s insurance policy will allow for additional homes, because generally it won’t as 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 that, at some point, one or more of these homes is likely to be vacant and things can go downhill quickly when a home is left vacant. When an investor’s homes are vacant, he may make the common mistake of assuming that he doesn’t need as much insurance coverage. But just because the owner isn’t there doesn’t mean the home won’t have a water leak, won’t have an electrical fire, or won’t get burglarized. These are risks an investor takes when leaving a home vacant, so it’s important to be sure that 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 his properties are rentals. It’s imperative that an investor has plenty of both property and liability coverage in the event of an accident.
One might also consider umbrella coverage as a secondary liability insurance to act as additional protection from a potential lawsuit. Sometimes a lawsuit can exceed a standard homeowner’s policy and, thus, put one’s 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, so it’s very helpful to work with a skilled insurance agent to ensure they know the nuances of owning multiple properties. A knowledgeable agent will help ensure that an investor purchases the best coverage at the best price so he can rest a little easier at night knowing he’s covered.
APIA was founded in 2001 and has been providing property owners with real estate property management insurance coverage ever since. We understand owning multiple homes can be stressful, so be sure to contact us for our expert opinions and to get you the coverage you need for all your homes.
