Rental Property Investor · Bergen County, NJ · Member since 2019 · 4 posts · 2 votes
I am (hopefully) closing in on my first investment property soon (yay!!) and I dont know what would be the best practice for me considering I will be investing in many properties in the near future. Should I find an insurance broker or reach out to an insurance company?
I am an independent agent so I may be biased. My experience with insuring investors/flippers/etc. in this space is that you may end of doing multiple things in this area. You may flip one property, buy & hold another, etc. You want an independent agent with certain attributes:
1. represent multiple companies
2. have some expertise in REI or Contracting insurance
3. have companies that do both Personal Insurance & Commercial Insurance
4. able to insure properties in multiple states that you might invest in
5. are able to insure coastal properties if you intend to invest in NJ coastal areas
You can find potential agents by checking with others who are doing what you plan on doing. I would speak to several and find who you feel will give you the time to explain what you need and your options. You may want to have several quote on the first property to see how they perform.
It's different for different types of things, but for insurance the premium through a broker is (should...) be identical to what you'd pay if you called that carrier directly. The carrier just takes all the per policy funds they otherwise allocate towards marketing budgets and cubicles in call centers, and gives it to the insurance broker. So she or he personally makes a bit more, and will generally be more responsive than a cubicle person. That's in addition to doing all the shopping on your behalf to ensure it gets with the best carrier, which depending on what your wants/needs are, might be a carrier that charges a bit more but is known not to be (as...) stingy when it's time to pay out a claim.
Bundling multiple policies for discounts is also totally a thing for insurance. It's also the case that you want to avoid captive vendor employees of one specific carrier that have signed "do not compete, do not broker" employment clauses.
I am an independent agent so I may be biased. My experience with insuring investors/flippers/etc. in this space is that you may end of doing multiple things in this area. You may flip one property, buy & hold another, etc. You want an independent agent with certain attributes:
1. represent multiple companies
2. have some expertise in REI or Contracting insurance
3. have companies that do both Personal Insurance & Commercial Insurance
4. able to insure properties in multiple states that you might invest in
5. are able to insure coastal properties if you intend to invest in NJ coastal areas
You can find potential agents by checking with others who are doing what you plan on doing. I would speak to several and find who you feel will give you the time to explain what you need and your options. You may want to have several quote on the first property to see how they perform.
I am (hopefully) closing in on my first investment property soon (yay!!) and I dont know what would be the best practice for me considering I will be investing in many properties in the near future. Should I find an insurance broker or reach out to an insurance company?
Carmela, I'd add one more major benefit, and arguably the most important, to being with a broker versus going direct to the insurance company.
When you have a claim, and you do not agree with the way the claim is being settled, do you want to have your agent be an employee of that company or an independent agent representing you? The fact is that the independent agent can push back on an insurance carrier much more than one who gets a w-2 from that insurance company.
I suggest you going direct to the insurance company. This will save you money. You may not need all of the additional coverage that the broker suggests. Keep in mind that you’re not working with one!
You can also save more money and time by using the homeowner's insurance comparison tool. Get quotes from different companies and choose according to your need.
They've managed all my properties, past and present. I only had one glitch with them. When I sold one of my properties and cancelled the insurance, they failed to refund the unused portion of a policy paid one year in full.