Whether you have 1 or 100 investment properties, insurance is a key factor. But there is one mistake that thousands of investment property owners make. And it's EASY to see why. There are plenty of podcasters, bloggers, and even Bigger Pockets experts that tell you to do it. This video explains the #1 Mistake and how to avoid it. The #1 Mistake is:
Buying an ACV policy using Market Value to set the limits.
This is a horrible idea. First though, some important definitions:
ACV Coverage:
(Actual Cash Value) means that the insurance company will LOWER the payout in a claim based on the age of the property. Not good!
Market Value:
What you could sell the property for. This is NOT what insurance policies are based on. They're based on what it would cost to replace your investment property. Or the Replacement Cost Estimate (RCE)
CoInsurance Clause:
The dreaded penalty for insuring below the amount it would cost to replace the property.
Putting these together creates a mean soup of sadness when an insurance claim happens.
Want help solving insurance for your portfolio? We Got You!! Head to our website, enter a little info, share your current policies and we'll break it down for you.
www.shineinsurance.com
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