Investing in properties can be immensely rewarding, but it does come with its own set of unique challenges, particularly concerning insurance. More and more investors are acquiring properties through land trusts, family or estate trusts, LLCs, and corporations instead of their personal names. This trend often leads to hesitancy from insurance agencies that may not fully grasp the needs of property investors. Fortunately, we’re here to bridge that gap and provide tailored insurance solutions specifically for property investors.
Navigating the Insurance Landscape
Our agency collaborates with over 30 Florida insurance companies, ensuring that we can shop your property and liability insurance with companies that welcome purchases made by entities. We have intentionally partnered with insurance providers who understand and are eager to meet the unique requirements of property investments.
Understanding Insurance Policy Options
Property investors have diverse insurance needs, and we offer a range of policies to meet those needs effectively:
- DP1 – Basic Insurance Policy for Rental PropertiesThe DP1 policy is the most basic insurance available for rental properties, offering limited coverage ideal for landlords looking to minimize costs. This named perils policy covers specific perils listed in the policy but typically excludes theft, burglary, vandalism, malicious mischief, accidental water damage, falling objects, and replacement cost coverage on contents, as well as often the structure itself. However, we have partnered with companies that provide replacement cost loss settlement on the structure, making the DP1 form acceptable to lenders. It’s crucial to communicate your coverage needs clearly with your agent when considering a DP1 policy.
- DP3 – Comprehensive Coverage for Rental PropertiesThe DP3 policy offers extensive coverage and is often referred to as an open perils policy. It covers all perils except those explicitly excluded in the policy. The DP3 is a replacement cost policy that can cover your contents and provide loss of rents coverage. It is one of the best non-owner-occupied policies on the market, offering robust protection for your investment.
- Renovating? Consider a Builders Risk PolicyFor those renovating properties, a Builders Risk policy provides coverage for damage to the insured structure and liability during the renovation process. Policies can be written in terms ranging from 2 to 12 months. Typically, renovations need to improve the property by 50% of its value to qualify for a Builders Risk policy. However, we represent a company that requires only a 20% improvement, with the shortest term being six months, and liability must be written separately. For cosmetic changes that don’t qualify for a Builders Risk policy, we offer Vacant Dwelling insurance.
- Liability Insurance/Medical PaymentsThis coverage protects you if you are sued for bodily injury or property damage to others’ property. Coverage amounts range from $100,000 to $1,000,000, with $300,000, $500,000, and $1,000,000 being the most common. Medical payments coverage, usually included in a dwelling policy, offers smaller coverage amounts ($1,000-$5,000) for medical bills resulting from injuries on your property. Notably, liability and medical payments coverage are not always offered for properties purchased in the name of an entity (LLC, Corp, or Trust) but can be purchased separately—we can accommodate this as well.
When working with you, we evaluate your situation and needs to properly insure your property. We become your insurance partner, allowing you to focus on what you do best—buying, selling, and managing properties. Trust us to provide comprehensive and tailored insurance solutions that meet your unique needs as a property investor.
Call us today at 813-653-0681. You can ask for Larry Johnson or email him at larry@runnelsinsurance.com.
