Asset Protection Steps for Investors
1. Conduct Regular Inspections
- Schedule routine property inspections.
- Address health and safety issues immediately.
- Keep detailed records of all inspections and repairs.
2. Address Tenant Complaints Promptly:
- Establish a system for receiving and responding to tenant feedback.
- Document responses and actions taken for each complaint.
3. Transfer Risk:
- Hire only licensed and insured contractors and suppliers.
- Require evidence of insurance from vendors before allowing work.
- If using a management company, ensure they require vendors to have minimum $1 million coverage.
4. Eliminate or Mitigate Risks:
- Remove high-risk features (e.g., diving boards, pool slides).
- Restrict access to potentially dangerous areas.
5. Ensure Adequate Insurance Coverage:
- Regularly review your insurance policy for comprehensive coverage.
- Ensure coverage includes liability for injuries and property damage.
- Opt for policies that cover legal defense costs.
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6. Understand Insurance Options:
- Assess need for basic, broad-form, or special form coverage.
- Consider actual cash value vs. replacement cost coverage.
- Investigate specific additional coverages (e.g., flood, earthquake).
7. Evaluate Deductible Levels:
- Choose a deductible that balances risk and premium cost.
- Consider higher deductibles if financially viable.
8. Selecting Insurance Providers:
- Research and compare multiple insurance providers.
- Check the insurer’s financial health and claim history.
- Ensure chosen policies meet your specific needs.
9. Consider Additional Insurance Options:
- Evaluate need for loss-of-rents, workers’ compensation, and non-owned auto liability coverage.
- Look into fidelity bonds and endorsement for money and securities.
- Check for building ordinance insurance if applicable.
10. Manage Multiple Properties Efficiently:
- Consider a single policy for all properties.
- Evaluate the benefits of an aggregate deductible.
11. Opt for Excess Liability Coverage:
- Determine if an umbrella policy is necessary for added protection.
12. Educate Tenants on Renter’s Insurance:
- Encourage tenants to acquire renter’s insurance.
- Provide information on benefits of renter’s insurance.
13. Effective Claim Handling:
- Document incidents immediately with photos or recordings.
- Notify insurance promptly and follow up in writing.
- Maintain an organized filing system for all property records.
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