Educating Yourself On Insurance Issues
As Real Estate Investors, we face many issues and concerns when running and growing our businesses, not the least of which should be a good understanding of the Insurance Issues which affect us.
I'm going to spend the next 1-2 weeks highlighting some important issues you need to be familiar with and make sure the agent and company you are working with know how to help you apply them and use them to your advantage.
Let's start on the property side:
ACV vs. Replacement Cost vs. Market Value (or Agreed Value):
Make sure that you understand the difference between these options. Also understand what a coinsurance penalty is, and how it may apply to your units. Every property, and property owner, for that matter, is different. Your comfort with how these options affect your coverage is vital for you to make an educated decision on which option to carry per property. ACV may be “cheaper”, but could cost you when depreciation is applied to a claim.