Investing in real estate is different than investing in Wall Street stocks. Stocks are speculative, and they’re also a “paper asset.” The stocks might go up and down but there isn’t much that can happen to the “financial instrument” itself (especially since they’re stored electronically instead of as stock certificates now). Real estate on the other hand, when done properly, provides steady cash flow and is a real asset… which means something could happen to your real estate.
While the cash flow from your rental property is a positive aspect, it’s crucial to safeguard the real asset and yourself. Insurance plays a crucial role in this protection, serving as a “reset button” to aid in financial recovery after a loss. If you’re a real estate investor, you might be contemplating, “What insurance do I need for my rental property in Fort Myers?” It’s essential to explore and secure the appropriate insurance coverage to mitigate potential risks and losses associated with your rental property.
Here’s a checklist of insurance that you may need:
Checklist: What Insurance Should I Have For My Rental Property In Fort Myers?
There are many possible insurance products that can benefit you but the primary ones are below. (You may choose to purchase the relevant ones separately or you might want to ask your insurance broker if they have “landlord’s insurance” since some insurance companies will package the right ones together for your convenience.)
Property Insurance. Property insurance is designed to provide financial protection against various events and natural disasters that could damage your property. The specifics of each policy can vary, but typical coverage includes protection against risks like fire, lightning, and wind damage. However, depending on your location and specific risks, you may need to consider additional coverage or a specialized “rider” for situations such as floods, especially if you reside in an area prone to such natural events. Understanding the specific risks in your area will help you tailor your property insurance to provide comprehensive protection for your rental property in Fort Myers.
Liability Insurance. If a tenant or visitor injures themselves on your property, they may sue you to help pay for their medical bills and loss of employment income. Liability insurance helps to protect you from the financial burden if a lawsuit goes against you.
Tenant Insurance: Tenant insurance isn’t something you need to get for yourself but we’re mentioning it here because it’s something you should urge your tenants to get. Tenant insurance is insurance for tenants that will cover any financial loss of their belongings.
Here’s How These Insurances Work
As an example, if a fire starts, your property insurance may cover the repairs to the property, the liability insurance may cover you if the tenant chooses to sue you, and the tenant insurance will cover any damage to the tenant’s belongings.
Get The Insurance You Need
In addition to property insurance, there are other types of insurance worth considering for your real estate investment venture. Business insurance can be crucial, providing coverage in the event that you are injured and unable to work. Additionally, you may explore other insurance options available through your credit card or bank, which could offer coverage for bills and expenses in case of a loss of income. Assessing your overall risk profile and financial needs will help you determine the most comprehensive insurance strategy for your real estate activities in Fort Myers.
Insurance needs are different for every situation; we’ve covered the 3 basic insurances above to get you started but you should always talk to an insurance professional who can assess your needs based on your individual situation.