What is Surplus Lines Insurance?
Surplus Lines Insurance protects against a financial risk that is too high for a regular insurance company to take on. It can be used by companies or purchased individually.
Buying insurance should not be a mystery or a step into the unknown. That’s why one trend I’ve seen in working with clients is concerning. Some insurance companies or agents don’t provide an actual policy, when issuing a Surplus Lines Account. If you are a client in this situation, take action to fix this problem immediately. Since smart people don’t take advice without asking “why,” I’ll answer that “why” question for you.
Why You Need a Surplus Policy in Hand
The two strongest reasons are:
- IT’S THE LAW!
- You need it as a reference for questions that will surface.
The basic premise of insurance is that you have a contract. Would you enter into a contract without knowing what the contract said? Of course not. I know people don’t always read every word they sign their names to (think car loan documents, mortgage closing and warranty paperwork), but it does not negate the fact that you should read everything you sign, word-for-word. The difference here is that you can reference any of those documents because you were given a copy of them. While some of these documents have become fairly standardized over the years, don’t count on it. Surplus Lines Insurance documents are not standardized!
Here’s the Bottom Line
You are paying for this policy with your hard-earned money. Just because the possibility of filing a claim may be small, don’t treat getting what you paid for lightly. At some point, you may have to ask yourself if cheap insurance is going to result in expensive problems. An insurance company can’t create cheap premiums without eliminating “something.” Is that “something” really something you can live without?
Take Heed. If you do not have an individual and separate policy for your investment property portfolio, take action immediately. If you have a policy in hand, read through it.
- Know for yourself that it is meeting your needs.
- Know for a fact that you (and your business partners, if applicable) are the only ones on this policy.
- Know for a fact that the coverage limits you have been given are your coverage limits and yours alone.
Don’t blindly trust that you are going to get the policy you expected. Your investments are too valuable for you not to know exactly what the insurance policy covering them says.
Let Us Help You With a Surplus Policy
Be proactive with your investment property insurance! Don’t take for granted that just because you have insurance it’s enough insurance or the right type of insurance. Let Asset Protection Insurance Associates (APIA) help you get it right. Our insurance experts specialize only in Real Estate Protection Insurance. As a consumer, it’s your responsibility to protect your investments and property. The coinsurance percentage is in place to give you some variance in your individual situation. But insurance is not designed to be an edge-of-a-mountain walk. The risk of you not being fully covered is not compensated by the reward of saving a few dollars in premiums. At APIA, our recommendation is to take a moment to get with one of our agents and go over your policies. Our APIA agents will do this annually with you; it’s simply a matter of you making the time for us to help.
What We Do
At APIA, our mission is to build strong relationships with clients by providing exceptional customer service, competitive pricing, promptness in delivering important documents, and responding to questions and concerns. We have the flexibility to meet the unique demands of both investors and financial institutions.
Multiple policies can be a lot to track. APIA has built programs to put all your properties under ONE insurance policy. We’ve been helping investors save time and improve cash flow nationwide, since 2001. We also work with financial institutions and mortgage services to help simplify the process of REO and force- placed insurance.
