Broker - not single brand:
If you watch TV and can remember the insurance commercials you see, it's clear that some really large companies dominate the insurance industry for homeowner and auto coverage. The biggest advertisers are single brand agencies. If you walk in the door, you're buying State Farm, or Allstate, or Farmers.
You will normally have a better selection of coverage for your business and the houses you own in real estate investing if you work with an insurance broker who can place your coverage with multiple companies. This allows them to find the lowest price coverage that meets your specific needs.
House insurance:
Of course, the first thing that comes to mind when discussing choosing an insurance agent for a real estate investing team is the insurance of homes you own. Long term rental investors are always looking for affordable coverage that will provide adequate protection at a cost that will keep their ROI on track.
"You get what you pay for" usually applies in insurance coverage. There are a great many options, such as "replacement cost," that add to the premium cost. You want an agent who will put all of your options in front of you, explain them, and help you to protect your investment at the lowest cost.
Construction & temporary coverage:
If your real estate investment activity includes rehab flipping, you'll definitely need coverage that includes liability and the structure while you're doing the repairs and rehabilitation work. The insurance broker can help you to locate affordable temporary coverage that will protect you not only from property damage, but also lawsuits related to contracting.
Even if you're just wholesaling, you will have holding periods before you get the home into the possession of your real estate investment buyer. You'll want the property to be covered during this period, as most existing seller policies expire at the closing.
Business coverage:
Real estate investors often start out as sole proprietors, maybe do a little bird-dogging, then some other wholesaling, then move up to other investment strategies. Doing it right means that your business is going to grow, and many times that growth is sooner and faster than expected.
As your business grows, you'll want insurance coverage for the business itself, such as liability and possibly other coverages if you maintain an office outside the home. A good independent insurance broker can provide all types of coverage.
Insurance agents are important team members:
Even if you're just helping a consumer who is purchasing a home from you to find insurance coverage, you'll want to be able to call on a trustworthy and responsive insurance agent. When you're going to hold properties as rentals, you definitely will want an insurance agent team member who is looking after your interests.
Insurance agents are a bit like policemen. Until you need one you may minimize their importance in your life. When you need one, they're extremely important and you need them in a hurry. Don't shortcut the selection process for your team. Get recommendations from real estate agents, other investors and mortgage brokers.
