Single Family Residential (SFR) home investing is a great use of investment resources. All investors understand the importance of maintaining insurance on all investment properties, however, when it comes to SFR investment homes, the structure of the general liability insurance is equally as important as the coverage. After an investor purchases their first SFR investment home, he or she will most likely purchase a general liability policy to protect against third party claims. A temptation exists, as the investor grows his or her portfolio and purchases additional homes, to add the new homes to the current general liability policy. We suggest that adding multiple SFR homes to a general liability policy is a potential costly mistake.
The purpose of a general liability policy is to provide financial protection based on the third party liability risks associated with an investment property. Let us assume you purchase a general liability policy with a one million dollar limit based on your one SFR investment property. Over the course of the next year, you add four additional single-family investment homes. Your actual exposure to a third party liability claim is significantly higher with five homes than with only one. In addition, while a policy limit of one million is adequate for one home, if you experienced a large claim at one location, then your policy limit will erode such that the remaining limit will likely not be adequate protection against future claims.
Whether you have one SFR investment or one hundred SFR homes, our team is ready and available to help you review your general liability policy structure and determine the best fit based on your needs as a real estate investor.
REI Choice is the bi-product of a seasoned real estate investor and successful insurance executive. The ideation behind the company began in 2017 from a chance introduction and a combination of two unique visions. We are a licensed insurance agency in the State of Texas. We are able to offer these products nationwide.
REI Choice Insurance, LLC
519 East Interstate 30
Rockwall, TX 75087