Everything You Need to Know About Real Estate Investing Insurance

Real estate investing insurance

Real estate investing insurance is imperative if you’re buying and selling real estate of any kind for a profit. Real estate investors come in all shapes and sizes, and so do the insurance policies that cover them. But where do you even begin to protect yourself as a real estate investor? How do you know if you are, in fact, a “real estate investor?”

Weed Ross is a highly experienced insurance agency that deals with pretty much every type of insurance policy under the sun. If it needs protecting, we can write it, and we can cover it. But we also pride ourselves on keeping our clients informed, so below, we’ve put together everything you need to know about real estate investing insurance.

In this article, we’ll cover the following:

What is a Real Estate Investor?

A real estate investor is an individual that invests money and different types of properties, buying and selling mortgages, collecting rent, and utilizing other methods to turn a profit. That’s really all there is to it; we just thought we’d make sure to start off on the right foot.

Real estate investors can either actively or passively invest in real estate, but both require a ton of knowledge about how the industry works. This is especially true because of the sizable risk a real estate investor might take on a daily basis—after all, real estate is not typically thought of as a small investment.

But how do real estate investors make money? The primary way that real estate investors gain capital is through appreciation, or when their properties go up in value, and they’re able to sell them for profit. So, there is certainly a lot of strategy involved, and like any other money-making company, it’s absolutely integral to protect your business in any way that you can. But these needs are quite different from general business insurance. For this, there’s real estate investing insurance.

What is Real Estate Investing Insurance?

Real estate investing insurance is a type of insurance that protects a real estate investor’s portfolio from the numerous risks associated with acquiring and selling properties at an investment-level scale. When you’re making several large transactions throughout a given period, you might see how this is a little different than your standard home insurance or second-home insurance policy. Depending on the type of real estate investing you’re doing, you may need a highly tailored real estate investment insurance policy. Are you just getting started? Are you an established real estate investment business?

Are you operating a REIT? Either way, real estate investment insurance policies must be unique to ensure that your portfolio is entirely secure.

What are REITs?

REIT is an acronym for real estate investment trusts, something you probably could have guessed, if we’re being honest. But what are they? REITs are businesses that utilize real estate as a source of income by owning or financing several properties at a time and renting them out. REITs are essentially very busy landlords that typically allow investors to invest in them and trade shares of the organization on major stock exchanges. To become officially titled a “REIT,” however, these companies have to meet a range of qualifications and requirements.

REITs own and operate a variety of types of properties, including residences, commercial buildings, apartment buildings, shopping centers, hotels and more. A REIT makes money by purchasing properties or buying mortgages for a profit, but they also generate income by allowing investors to buy shares, just like your standard stocks.

What are the Most Common Types of Real Estate Investing Insurance?

There is a myriad of options for real estate investors when creating their investment insurance policy, so we understand that it can definitely be hard to piece together. Additionally, having an incomplete policy for your real estate investment portfolio could be detrimental to the business, so you can’t exactly afford to make mistakes, either. For this reason, it’s imperative to consider all of your options and speak with a qualified real estate investment insurance expert. We might just have a few here at Weed Ross—hint, hint. But let’s cover a few of the most common types of real estate investing insurance coverages to get you started:

  • Liability Insurance: liability insurance protects real estate investors from accidents that might happen in or around the dwelling, like if a tenant or a guest gets hurt.
  • Landlord Insurance: landlord insurance protects real estate investors from damage, losses, and incidents related to tenants in the actual properties. These coverages apply to the property itself, which is handy in circumstances of property damage or rental income loss.
  • Hazard and Fire Insurance: hazard and fire insurance protects real estate investors from incidents such as theft, fire damage, storm damage, and other hazards. Pretty straightforward, huh?
  • Loss of Income Coverage: loss of income coverage protects real estate investors if one of their properties becomes uninhabitable, causing the investor to lose a large amount of anticipated income.
  • Builder’s Risk Insurance: builder’s risk insurance protects real estate investors from things like vandalism, theft, and property damage associated with a vacant property or a dwelling that’s undergoing renovations. 
  • Workers’ Compensation Insurance: workers’ compensation insurance protects real estate investors from issues and incidents involving their employees, should the real estate investment business be large enough to merit hiring them. This coverage offers reimbursement for medical expenses or lawsuits around employee injuries.

What Features are Most Important for Real Estate Investor Insurance?

As a real estate investor, you likely depend heavily on your portfolio, so you’ll want to make sure that your investment insurance policy meets a certain standard. Make sure your real estate investment insurance offers a range of limits and deductibles so that you can fit your policy to your specific budget and size of portfolio. Additionally, make sure your policy is customizable, and that you can get ahold of your insurance agents easily. When investing in real estate, things can change quickly, and you need to be able to adjust your policy as you buy and sell properties, or as the market fluctuates.

We’re those insurance agents—the ones you’re looking for to handle your real estate investment insurance. So if this article didn’t quite cover everything you were looking to find out, get in touch with the local, readily available agents at Weed Ross. We’re ready to get started, are you?

450 Olean Rd.
East Aurora, NY 14052


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