The first question most real estate investors ask about our insurance program is, “What are your rates”. As investors ourselves, we get it. Unfortunately through the years, having to file enough claims, I’ve come to appreciate a lot more about my coverage than the cost.
Many Single Family Residential investors state, “I just want to cover it for what I owe on it” because they are used to the old way of doing things and chasing that rate. But, many do not consider how that might affect them come claim time. In the past, a good portion of SFR policies were sold as Actual Cash Value (ACV) policies in order to get a better rate. In today’s marketplace however, the Replacement Cost Value (RCV) policies provide a much better value without the premium rate in the past.
With today’s increasing home values, insuring to value is important to stay within the co-insurance percentage of course. But, if managed correctly, the RCV policies provide full replacement of like kind and quality with no depreciation unlike the ACV policies. Come claim time, it is a much better experience for the SFR investor.
Many of our client’s properties are in a concentrated area. Mine are too. Several years ago, there was a large hail storm that caused me to replace the roof on four rental properties in one month. The “cash value” was so low, I barely cleared the deductibles. This $15,000 expense really hurt my cash flow on my entire portfolio.
Take a look at your coverage type and deductible. You may have exposure you can’t afford, or you may be taking unnecessary risk. Take five minutes to get a quote online today, and see why thousands of investors have chosen REI Choice Insurance.