Do I Need Insurance?
The decision to purchase an insurance policy depends on each person's risk tolerance. Many people don't consider insurance important until they experience a loss. As real estate professionals, it is our duty to inform our clients about the importance of having an insurance policy to protect their investment.
What Does Insurance Protect Me From?
There are different types of policies; however, in real estate, the most important coverages are designed to protect:
- The internal and/or external structure of the property
- Personal belongings inside the property
- Third-party damages (accidents occurring on the property)
- Damages to other properties (in the case of condominiums)
What Insurance Do I Need?
There are various types of insurance, and not all property owners need or seek the same coverage. It is essential to specify the policy coverage, restrictions, and exclusions to cover potential risks.
The most important elements to consider when deciding on the type of coverage you need are:
- Property Usage:
- Investment, rental, vacation, or primary residence
- Liability Coverage
- Protect against legal actions and medical expenses
- Protection against damage to other properties
- Personal Belongings and Interior Flooring, walls, ceilings, electrical installations, appliances, or air conditioning
- Location:
- Hurricane-prone area: Usually requires an optional policy
- Flood zone: Required by the government and lenders
- Type of Property:
- House and Townhouse: Structural protection, flood, disaster, and hurricane coverage
- Condominiums: Buildings typically have a general master policy covering the structure and common areas against flood and disaster
- Number of Properties:
- Multiple properties: You can use "umbrella" policies that spread the cost across several properties.
Ways to Reduce the Cost of the Policy
- Increase your deductible: As a property owner, you can save money by raising your insurance deductible—the amount you must pay when a loss occurs before the insurance covers the remaining balance. This is one of the most common ways to keep insurance costs low and is a great way to save, provided you have the deductible amount available in case of a loss.
- Install an effective alarm system: Insurance companies offer discounts for having an alarm system.
- Handle minor claims yourself: Frequent claims can lead to higher premiums. Paying for minor incidents out of pocket can prevent your insurance costs from rising.
Seek advice from an insurance broker: When acquiring your property, or even after, it is never too late to evaluate the conditions, terms, and coverage of your policy.
Enrique Vicente Urdaneta
Real Estate Advisor | eXp Realty | EVU Luxury Homes
305.209.6418
www.instagram.com/evuluxuryhomes
Disclaimer: The information presented in this article is intended to provide a general understanding of the topic. However, please note that I am a real estate agent, not a lawyer, accountant, tax, or financial advisor. This content should not be taken as legal, tax, accounting, or financial advice. The laws and regulations related to this topic can be complex and may change or expand in the future. Therefore, it is crucial to consult with a qualified professional, such as a specialized financial or tax advisor, before making any decision based on this information. As a real estate agent, I can provide various options and professional guidance related to the real estate aspects of your investment strategy, and for matters related to tax implications, legal issues, and financial planning, please consult with the appropriate professionals, which whom I have allies I can refer.
