Starting Out
Market News & Data
General Info
Real Estate Strategies

Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal



Real Estate Classifieds
Reviews & Feedback
Updated 2 months ago on . Most recent reply

Insuring beach home
I'm in the final stages of purchasing a beach home that I will be using as a short term rental. On review of insurance I'm terrified of being under insured and could use some advise on what I should be doing. The quotes I'm getting seem to imply my coverage is far less than what I'm purchasing the home for.
Most Popular Reply

Find out whether the quote is actual cash value (ACV) or replacement cost estimate (RCE). A lot of insurers are offering ACV as a way to keep premiums down in high cost areas. The tradeoff is that ACV brings depreciation into the value - so if a roof has to be replaced and costs $30k, but it's ACV was only $5k at the time of loss, then insurance is only paying $5k. Make sure you have coverage for hurricanes/wind and hail. If you have a lender on the purchase, I'd be shocked if they allow you to proceed with insufficient insurance. We dig into the quote to make sure the collateral is sufficiently protected.
- Patrick Roberts
