March Madness is almost over and I am ready for NCIS to be back. Well, enough of guilty pleasures, now comes more of the real “pleasure” of saving money. I never really thought much about insurance when we first became landlords, back then it was cheap and it didn’t seem to matter. These days the cost of everything has escalated and it is time to give the subject a review.
As discussed last time paying in split payments can help…but then, how about really knowing what you are paying for.
I have come to the conclusion that knowing about what you are buying is VITAL in any business but in ours even more so. Do you know the difference between a homeowners policy and a DP – dwelling policy? Well, I didn’t really and if you are buying houses or just getting the insurance your lender requires you need to know more about it.
DP’s come in different flavors….actual cash value, replacement value, etc. I can only speak for Florida but your regular policy may not cover wind damage and does not cover flood.
My best suggestion is to go insurance AGENT shopping. For a long while I just purchased what the agent recommended….after all, she had my best interest at heart…right? Well, after realizing that I was paying almost twice what I could pay in many cases I started doing some research and found an agent who would help me understand all my options.
When you think about how an agent is paid you might see that they would recommend the priciest policy, and if that is what you truly need – great. But understand before you pay. Get some recommendations from people you trust, your CPA, friends in the industry and start calling around. Make an appointment to have them review your policy and educate you as well.
Another thing to ask is service after the initial purchase, will she send copies of the policy to your lender if asked, does she answer her phone? These seem like little things but they can save you money and peace of mind.
Happy learning, “ til next time.
