| One of the least considered, but perhaps most | | | | amount of liability insurance to protect |
| important aspects of successful real estate | | | | themselves and their personal assets. It may |
| investment is insurance against losses. Even | | | | also help to have your insurance professional |
| though the market for residential real estate | | | | "walk" the property with you to point out |
| has begun to cool, commercial real estate | | | | potential hazards before they become law |
| investment opportunities abound. Commercial | | | | suits. |
| properties have additional risks that need to | | | | |
| be mitigated and in today's litigious | | | | Hazard insurance provides protection in the |
| society, it is important for investors to | | | | event of damage from fire, accidents, theft, |
| take the steps necessary to protect | | | | and vandalism. Depending upon where you |
| themselves and their investments. | | | | live, you might want to look into adding |
| | | | protection from storms and natural disasters. |
| As the housing market begins to cool off, the | | | | All owners of real estate should have this |
| investment risk of real estate has increased | | | | insurance and again, if a loan is involved, |
| somewhat. Residential and commercial real | | | | the lender will require you to purchase it |
| estate investors can no longer rely on a | | | | and name them as an additional insured. |
| continually increasing market to bail them | | | | |
| out of mediocre or bad purchases. The only | | | | Environmental insurance is a new form of risk |
| real insurance you have here is to study | | | | management that is gaining in popularity with |
| investment analysis further and to really | | | | lenders. Instead of performing Phase 1 and |
| check your market before committing funds to | | | | Phase 2 environmental studies, more lenders |
| a transaction. | | | | are opting for insurance against this type of |
| | | | loss. Because lender liability is limited in |
| There are other risks in commercial real | | | | current law, the focus is on paying the |
| estate that you can mitigate through third | | | | outstanding loan balance or the cost of clean |
| party insurance policies. The most common | | | | up, whichever is less. A word of caution |
| form is title insurance. Most real estate | | | | here: Make the lender get the insurance |
| professionals recommend that buyers obtain | | | | (you'll still have to pay for it) … |
| title insurance on any property they purchase | | | | it's not your job to understand the |
| and if a loan is involved, the lender will | | | | intricacies of environmental pollution and |
| make it a condition of obtaining the loan. | | | | its risks. |
| The purpose of title insurance is to protect | | | | |
| the buyer in the event that problems are | | | | In addition to these basic forms of real |
| found with the title after the close. Even | | | | estate insurance there are other types of |
| though all sales of real estate include a | | | | coverage that you may wish to consider. For |
| title search, it is a good idea for the buyer | | | | instance, those properties located in or near |
| to purchase separate title insurance as an | | | | flood zones may wish to purchase flood |
| extra measure of protection against mistakes | | | | insurance, while those in earthquake prone |
| in the search. This extra insurance will | | | | regions may want to consider the purchase of |
| help protect the buyer in the event of any | | | | additional earthquake insurance. And in the |
| undiscovered liens, disputes over property | | | | wake of 9/11, there is even the opportunity |
| lines, or other matters affecting title. | | | | to purchase terrorism insurance! |
| | | | |
| Another common, but important form of | | | | In the final analysis, each real estate |
| insurance for investment property is | | | | investor has to look at his or her own level |
| liability insurance. This provides the | | | | of risk tolerance and what might actually |
| investor protection from liability in the | | | | affect the real estate investment. From |
| event an individual is injured while on the | | | | there, with the help of an experienced |
| property. It is all too common for | | | | commercial hazard insurance broker, you can |
| individual property owners to be sued for | | | | then purchase the right mix of insurance |
| seemingly frivolous reasons, so it is vital | | | | needed to adequately address and mitigate |
| for all property owners to carry a sufficient | | | | those risks. |