First the reasons why most buyers of selected properties purchase investment property insurance is to protect their investments.
In the realm of buying an investment property, there in lays a few pitfalls that can totally ruin the unsuspecting buyers, or the just plain cheap ones as well. Disasters happen, fires, earthquakes and hurricanes, to name just a few of the larger more well-known natural disasters, decimate millions if not billions of dollars worth of rented and owned properties each year. The reality of the requirement and not the wanting of investment property insurance are real and a present risk. Investment property insurance has all to do with risk management and not much to do with the uncertainty of natural disasters. Natural disasters, although horrendous and terrifying when they hit land or destroy entire communities, are not constants. The investment property insurance policies can do nothing to either deflect those natural tragedies or protect the physical well-being of those impacted. When a storm, such as a hurricane, decimates a coastal community, it is not the investment property insurance that has protected the community; it is the indemnification of the said residential and commercial housing units that the policy will replace.
Their will always be a risk-association with the housing units that are purchased with investment proceeds in mind. It is the role of the insurance agent who markets and sells the policies that are the integral part of the investment property insurance scenario. Natural disasters are the rarest of losses that are paid out for the investment property insurance policies. The number one loss risk factor is time. Time and the depreciation that totals in the billions of dollars in lost premiums, haunt the insurers that work in the filed of investment property insurance policies.
The legal and ethical reasons for taking out the sometimes expensive policies for the investment properties are both realities and voluntary. There are minimum mandatory limits that must be met before any sale of an investment property is sealed. These laws are enacted to protect the buyer and the seller in the event of an emergency and the subsequent losses that arise from such natural or man-made disasters. Investment property insurance is a great idea and one that should be treated as important as the house itself.
In the realm of buying an investment property, there in lays a few pitfalls that can totally ruin the unsuspecting buyers, or the just plain cheap ones as well. Disasters happen, fires, earthquakes and hurricanes, to name just a few of the larger more well-known natural disasters, decimate millions if not billions of dollars worth of rented and owned properties each year. The reality of the requirement and not the wanting of investment property insurance are real and a present risk. Investment property insurance has all to do with risk management and not much to do with the uncertainty of natural disasters. Natural disasters, although horrendous and terrifying when they hit land or destroy entire communities, are not constants. The investment property insurance policies can do nothing to either deflect those natural tragedies or protect the physical well-being of those impacted. When a storm, such as a hurricane, decimates a coastal community, it is not the investment property insurance that has protected the community; it is the indemnification of the said residential and commercial housing units that the policy will replace.
Their will always be a risk-association with the housing units that are purchased with investment proceeds in mind. It is the role of the insurance agent who markets and sells the policies that are the integral part of the investment property insurance scenario. Natural disasters are the rarest of losses that are paid out for the investment property insurance policies. The number one loss risk factor is time. Time and the depreciation that totals in the billions of dollars in lost premiums, haunt the insurers that work in the filed of investment property insurance policies.
The legal and ethical reasons for taking out the sometimes expensive policies for the investment properties are both realities and voluntary. There are minimum mandatory limits that must be met before any sale of an investment property is sealed. These laws are enacted to protect the buyer and the seller in the event of an emergency and the subsequent losses that arise from such natural or man-made disasters. Investment property insurance is a great idea and one that should be treated as important as the house itself.
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