| What Real Estate Investors Must Know About | | | | vacuum salesman slips on his way up your walk, you |
| Insurance and Risk Management | | | | can rest easy, because your liability insurance will |
| The real estate investment market has seen | | | | cover his medical bills and any resulting settlement |
| considerable growth in the recent past. The price of | | | | lawsuit. |
| homes is on the rise, and relaxation of many | | | | There are many other forms of insurance, which |
| demands and regulations on investors has stirred | | | | have been designed to cover any number of possible |
| significant interest from many new economic groups. | | | | mishaps. Hazard insurance, for example, will cover |
| Lenders have lowered credit score requirements, and | | | | damage resulting from earthquakes, tornadoes, |
| waived some previously standard documentation. | | | | hurricanes, flooding, fire (natural), and dozens of |
| For these and other reasons, newcomers have | | | | other factors beyond human control. |
| flocked in record numbers to this game. None of this, | | | | You can buy insurance for chemical spills, fire (from, |
| however, will guarantee a profit on your investment. | | | | say, a candle), electrical failures, vandalism or theft, |
| As you increase the dollar amount of your | | | | faulty plumbing or wiring, and so forth. There's even |
| investment, so do you also increase the associated | | | | a policy designed specifically to cover large appliance |
| risk. | | | | failure. |
| It would be wise to become familiar with a few | | | | Landlords may purchase insurance to cover lapses in |
| different forms of insurance available to real estate | | | | rent payment, tenant-related damage to the |
| investors. | | | | property, and abandonment. |
| Title and liability insurance are among the most | | | | If you finance your property with a loan, the lender |
| common. Title insurance is designed to protect | | | | will likely require that you purchase mortgage |
| against issues that arise over the legal transfer of | | | | insurance, which pays out to a lender (not you) in the |
| title from seller to buyer. A title company will search | | | | event of default or disaster. |
| necessary databases to ensure that the property is | | | | The price of insurance varies according to the degree |
| free associated burdens, so that it may legally | | | | of coverage desired, and the associated deductible. |
| change hands. This type of insurance will cover | | | | Read the policies carefully, noting any fine-print issues |
| potential economic loss as a result of these and other | | | | which may be used later to deny coverage. There is |
| paperwork, filing, and tax issues. | | | | no law requiring that you use a specific insurance |
| Liability insurance protects a property owner against | | | | company, so do your research first. Shop around, and |
| injuries incurred on or as a result of using the | | | | look for the greatest coverage at the least |
| property. The insurance does not cover the property | | | | out-of-pocket expense. Find the policy that is |
| owner, but rather it was designed for injuries | | | | best-suited to your particular needs. |
| sustained by a third party. So when the door-to-door | | | | |