Wealth advisors who seek the support of an insurance broker not only set themselves up for success but most importantly, they also do so for their clients looking to purchase real estate.

An insurance broker provides a wealth of knowledge to help understand what potential liabilities ensue from the real estate purchase, as well as mitigate risk. 

This partnership will help you as an advisor, guide your client to make the best financial decision as well as plan for the future with the guidance of an insurance broker. Let’s dive into why an advisor should work with an insurance broker.

Types of Insurance Needed

The right insurance to cover your client’s upcoming real estate purchase depends on a variety of factors.

• What kind of real estate is your client purchasing?
• Where is the real estate located?
• What is the size of the real estate?
• What is the purpose of the purchase (personal or for business)?
• Is the real estate located in a climate that requires additional coverage (i.e. fire zone, earthquake zone, etc.). 
• And more

All of these answers will help advisors understand potential additional costs that may go towards insurance coverage (or even potential damage should an unforeseen issue arise). 

The different types of insurance policies your client may need for their real estate purchase include: 

• Homeowner’s insurance 
• Fire insurance 
• Flood insurance 
• Earthquake insurance 
• The list goes on

The Benefits of Working With an Insurance Broker 

An insurance broker can assess the real estate property to see what potential risks the property has. If the piece of real estate is located in a fire zone, the insurance broker can identify what coverage would look like.

Essentially, working with an insurance broker helps list out all of the different insurance possibilities your client needs. Basic homeowners insurance or umbrella insurance may come with exclusions for coverage for fires, floods, etc.

Knowing what additional policies may arise allows you to sit with your client and discuss their financial strategy to help them maintain their goals.

Once you have the full picture from the insurance broker you’ve partnered with, you can then budget appropriately. You then have all of the materials necessary to make sure you can give a holistic overview to your client and tell them, “this is a financially smart decision” or, “let’s find a different route for you.” 

The main benefits of working with an insurance broker can be boiled down to these three factors:

1. You help your client mitigate risk
2. You save your client money both short term and in the long run 
3. Your client will have better knowledge of the real estate investment they are making 
4. As a broker, you will then understand where you can save your clients money and where they may have to invest more

Read on for more information on risk mitigation.