You might be asking. What insurance should I have for my rental property in Pensacola? It has been difficult lately to get a decent property insurance coverage, in Florida specifically Due to the hurricanes and tropical storms we get here. Leaving real estate investors spending a lot of time looking for insurance coverage for their investment properties. If you’re asking what insurance should I have for my rental property in Pensacola, or anywhere in Florida, continue reading our article to find out!
Investing in real estate is different than investing in Wall Street stocks. Stocks are speculative, and they’re also a “paper asset.” The stocks might go up and down but there isn’t much that can happen to the “financial instrument” itself (especially since they’re stored electronically instead of as stock certificates now).
Real estate on the other hand, when done properly, provides steady cash flow and is a real asset… which means something could happen to your real estate.
The cash flow is nice… but you need to protect the real asset (and yourself). That’s where insurance comes in. Insurance is like a “reset button” to help you recover financially from a loss. If you invest in real estate, maybe you’re wondering, “What insurance should I have for my rental property in Pensacola?”
Here’s a checklist of insurance that you may need:
Checklist: What Insurance Should I Have For My Rental Property In Pensacola?
There are many possible insurance products that can benefit you but the primary ones are below. (You may choose to purchase the relevant ones separately or you might want to ask your insurance broker if they have “landlord’s insurance” since some insurance companies will package the right ones together for your convenience.)
Property Insurance. Property insurance should protect you financially from many of the events and natural disasters that may damage your property. All policies are different but you might get property insurance that covers you for fire, lightning, wind damage, etc. If you live in an area prone to a certain type of natural event (such as floods), you may need to acquire an additional “rider” for that special situation.
Liability Insurance. If a tenant or visitor injures themselves on your property, they may sue you to help pay for their medical bills and loss of employment income. Liability insurance helps to protect you from the financial burden if a lawsuit goes against you.
Tenant Insurance: Tenant insurance isn’t something you need to get for yourself but we’re mentioning it here because it’s something you should urge your tenants to get. Tenant insurance is insurance for tenants that will cover any financial loss of their belongings.
For tenant insurance, I will recommend the tenants to have one, but don’t pressure the tenants to have tenant insurance. As long as you’re covered. Tenants will have to make that decision if they have valuable items, and they want to insure they’re covered if something happened from a hurricane damage, or a wind storm damage.
Here’s How These Insurances Work
As an example, if a fire starts, your property insurance may cover the repairs to the property, the liability insurance may cover you if the tenant chooses to sue you, and the tenant insurance will cover any damage to the tenant’s belongings.
Make sure to have high liability coverage for all your properties. Just to make sure you’re properly covered if something happened. Usually a million per incident is good enough.
Get The Insurance You Need
There may be other insurance to consider as well, including insurance for your business in case you are injured and unable to work, or there might be other insurance available (such as those through your credit card or bank) to cover bills if there’s a loss of income.
It has been difficult to find a decent insurance broker in Pensacola, Florida. We have personally stopped dealing with a few in Pensacola, Florida. Because the lack of responsiveness and unethical practices. Like not following up with our requests, Like not responding to insurance requests. Or not canceling policies on properties we either no longer own. Or we had to go with another broker because they didn’t have the product the lender is asking for. And they didn’t cancel that policy after many requests via phone calls and emails!
Now, make sure not to only look for reviews for the insurance broker in Florida or in your town. Also, not to put a lot of properties with the same insurance broker company if you haven’t done business with then before. Try them with a property or two. And then you can give them more properties if they’re worthy of gaining your business from the first place.
It’s always easy for insurance companies or realtors to do well when the economy is great or there’s not much obstacles. But the real challenge is when the real estate market is down. Or insurance carriers start to bail out of Florida because the hurricanes we have here. And that’s my friends what separate the boys from the men.
Insurance needs are different for every situation; we’ve covered the 3 basic insurances above to get you started but you should always talk to an insurance professional who can assess your needs based on your individual situation.