An insurance policy is always required if you’re using financing. But even if you’re not, it’s pretty much a given that you need insurance coverage to protect yourself against major damages and lawsuits. Your level of protection is ultimately up to your risk tolerance, but just know that an insurance provider is provided where the company can make money on it.

Since you will be a remote investor, what you’re looking for is a landlord, fire, and liability policy. Be sure to get at least 2 to 3 landlord insurance policy quotes to get the best deal for the city you are investing in. The landlord insurance cost may be drastically different for a New York landlord compared to a Florida landlord due to natural disasters being more common in the area. If you will be living in one of the units of a multi-family home, you need standard homeowners insurance.

Home insurance comes in two types – replacement cost value and cash value. Let’s look at the differences between the two.