Monday, April 18, 2016

Landlord and Flipper Asset Protection Via Proper Insurance


There are a couple ways to protect your assets. One way is by forming LLC’s and or Trusts. Another is with Insurance. A combination of both provides your best possible protection.

This week at REI of Virginia our special guest speaker will be REI sponsor, Tripp Godsey of Farmers Insurance.

Tripp is going to head an in depth, educational conversation, on how to adequately protect your assets with insurance. What type of insurance is best for a flip? How much coverage do you need for your rentals? Is there a certain dollar amount of liability coverage that you should carry? Do you top that liability off with a 1 to 3 million dollar umbrella policy? How much coverage is enough to protect you from most lawsuits? Should you have an umbrella that covers personal liability or business liability or both?

Lots of questions…

We will also have a discussion about our local issues. Roanoke city has a lot of inexpensive massive homes. What’s the best way to insure them? You may have only paid 40K or less for the house. It’s tax assessed value may be 60K. Surely it wouldn’t be cost effective to insure one of these 3,500 square foot houses with full rebuild value.

Your objective in a total loss of one of these houses would probably be to replace it with another rather than rebuild it. You would also need some money to remove the burnt remains and get the lot back to grass to make the code enforcement department happy. That will cost you roughly 10K. If you bought full rebuild value insurance on a property of that scale your insurance premium would be though the roof and your rent wouldn’t justify the cost.

When dealing with a reputable company like Farmers or their subsidiary Foremost, how will Actual Cash Value insurance be handled? In the case of a total loss will you likely walk away with the full amount you have it insured for or only a portion of it?

More questions…

On your rentals, if you require your tenant to carry renters insurance or pet insurance to cover their dog, should you as the landlord also require them to add you as an additional insured? And if you do that and they end up making a claim, will that claim attach to your social security number or tax ID number and make your insurance premiums go up?

Lots of insurance questions this week guys and gals. Come on out as it’s going to be a highly educational meeting.

We’ll see you there!

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