29Jun

Foreclosed Properties Are A Headache In More Ways Than One

Avoid The Drive By –
Get Out And Inspect, Inspect, Inspect

In the business of lending, not all loans will perform. When this happens, the financial institution eventually becomes the owner of real estate, whether wanted or not. Taking possession of real estate exposes the owner to risks and opportunities for loss, even if being prudent and careful. Often times, it’s easy to forget to take steps in securing property or having an established policy and process for such foreclosed property, especially if it’s not a frequent occurrence.

As a leader in foreclosed property coverage, we’ve put together a risk management sheet that aims to provide some common sense advice, along with some advice we’ve learned through insuring these properties (school of hard knocks). We all know losses aren’t any fun, but it’s important and valuable to learn from claims and work towards reducing exposures that are controllable. Setting up a checklist and making sure responsibilities are assigned to specific people is an important step, and the risk management piece will provide a lot of steps for you to consider.

Avoid The Drive By –
Get Out And Inspect, Inspect, Inspect

The most important part of risk management of foreclosed properties is regular internal inspections (not just driving by) coupled with a desire to sell the property. In our experience, financial institutions see the most losses when properties are not inspected regularly, and are not maintained. Theft of copper piping, appliances and even built-in features are not uncommon losses. Aside from theft, our other most frequent loss is water damage. The easiest way to reduce this exposure is to turn water off and maintain minimum heat (in cold months).

Not every scenario can be anticipated and not every loss will be avoided; however, diligence in property maintenance and inspection can go a long way to mitigating loss. When avoidance and mitigation don’t work, that’s when Berkley FinSecure can help.

Make Sure Your Financial Institution Clients Have The Right Coverage For Their Foreclosed Properties

Through our financial strength and knowledge in the coverage, we can help remove questions when a loss does occur. That’s what it means to be experts focused on your protection. Knowing how policies and procedures will impact coverage is an important step to ensuring appropriate insurance is purchased. Contact any one of the FI insurance experts below for help in making sure your FI customers have the right coverage from a strong, stable company!