Common Insurance Issues That Cost
Real Estate Investors Thousands
By Sean Flanagan
The author has permitted the reprinting and redistribution of this
article.
The average real estate investor works their rear end off putting
together real estate transactions designed to fatten their investing
portfolio, increase their bank account balance, and reach their goals.
Then they do their level best to undo all that hard work by making dumb
decisions with the way they handle their insurance coverage. Are you a
smart, savvy investor destined for the real estate investing hall of
fame or do you need remedial education Take my quiz and let’s
find out.
Do you competitively bid insurance coverage for all your properties
every year Too many real estate investors go with the false assumption
that insurance coverage is all the same and that there isn’t
much difference between companies. This is an erroneous thought. There
can be massive differences in the premiums charged by your insurance
company – and large differences in the level of customer
service and support you can rely on as well. Your property insurance
isn’t a car commercial, but you need to regularly ask them
what they’ve done for you lately. Chances are – not
much – unless you count increasing your premiums and
outsourcing customer service to the lowest bidder. Competitively
bidding your insurance coverage about once every 1 ½-2 years
can solve this problem and keep more of your hard-earned money in your
pocket.
Do you understand your coverage or do you rely on your local agent to
fill you in on the details as needed I learned the hard way that
insurance agents aren’t always the most knowledgeable sources
of information about your coverage you can find. Most agents
won’t intentionally mislead you, but they’re only
human. Property and casualty insurance is an extremely complicated
subject with precise terminology and specific situations that can make
a huge difference between being covered and being exposed to a variety
of risks. It’s your job to know what coverage you have and
what your policies mean. Educate yourself in any way you can read a
book, call your insurance company – the claims office is a
good source for reliable information. Take responsibility for
understanding your insurance coverage. If you don’t,
it’s your rear end on the line and your assets that are at
risk.
Do you properly cover your interests on your subject to deals One of
the real estate investing secrets that some of the gurus teach can
leave you without coverage in the event of a loss. I’ve heard
of so-called gurus – who you would expect to know better
– telling their students that it’s perfectly OK to
leave the property insurance in the name of the seller. They just work
out a deal where the seller would split any insurance proceeds with
them in case something were to happen. Not only is this stupid, it
violates the insurance policy. On a subject to deal you’re
the owner of the property. If the coverage is still in the
seller’s name and something happens, the insurance could pay
the seller. However, if the insurance company finds out that
you’re the legal owner – and there’s no
reason to expect that they couldn’t – they will
refuse to pay. With a due on sale clause, the bank will call the loan
due. If this happens, who do you think they’ll come after
I’ll give you three guesses and the first two don’t
count YU!
Are your family’s health insurance needs covered Becoming a
real estate investor doesn’t mean you don’t need to
worry about what you’ll do if you or a member of your family
has a serious illness, has an accident, or needs major surgery. If you
took a guru-promoted real estate investing course, they probably took a
lot of time leading you to believe that the sun will forever shine and
it’ll never rain on your parade. I want you to stay positive,
but it’s not wise to go without health insurance. If you
don’t have any – get some. Today. If you
can’t afford it, see if your spouse can get coverage through
their employer. If that’s not an option for you, the burden
rests on you. There are some money-saving options available to you.
Look to any associations you belong to because a lot of times you can
get health insurance through them at group discounts. You
can’t afford not to be covered. Uncle Sam isn’t
likely to come swooping in on a magical horse and rescue you from your
failure to plan. Do what’s right. You owe it to your family.
Do you have short- and long-term disability insurance Most real estate
investors gave up disability insurance when they left employer
situations. What you may not know is you can get coverage at a
reasonable price without being part of a large employer group. The
rates for this coverage are reasonable and will help replace your
income in the event that you can’t work. I know some of you
are thinking, “I know, Sean, but I’m not likely to
suffer a career-ending injury negotiating a deal, so what’s
the point” The point is you could run off the road on the way
over to meet with a seller or you could have a heart attack. In a lot
of cases you can protect yourself for less than $75 per month. Why risk
it all to save a few bucks
So how’d you do Do you know it all or do you need to make
some phone calls I’d rather you do everything you can to
protect yourself than expose yourself to risks that can wipe out
everything you’re trying to build. Don’t sacrifice
your financial stability by not understanding how insurance ties into
your overall investing strategy. You’ve come too far for that.
You’re a real estate investor. Consider this an investment in
your future.
Sean Flanagan has a FREE audio course titled 7 Secrets to Making Big
Bucks in a Slow Real Estate Market which you can get right now by
quickly visiting httpwww.YuckyHouseSystems.com. He also gives away a
coaching program for new real estate investors where he offers a risk
free trial to prove to new real estate investors how much money they
can make with his program at httpwww.YuckyHouseSystems.com.
If
you would like to take advantage of the market and learn how to invest
in real estate and you are local to the Dallas Fort Worth area, I know
a really great teacher and mentor here in Arlington Texas. Please take
a look at his web site: DennisJHenson.com,
Dennis has a great Mentoring and training program, I know because I am
one of his former students. I learned a lot from his one on one
teaching technique. - Michael Harman 817-457-7572
mchfun.business@gmail.com
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