For most people, including Adam Hochfelder, having your own home is a very important segment of life, which is evident by the fact that even 92 percent of NYC's real estate properties, are privately owned. However, what many people often overlook is the insurance of their living space, which is equally important. Here the figure drops to only about 20 percent.
The sources of financial loss to real estate company owners and managers are as varied as they are significant.
You've might heard the expression, small claims do great accounts. Well, one of the reasons for this lies in the fact that we think that fires, floods, lightning strikes and other disasters can never happen to us and that this is an unnecessary expense.
In reality, many small accidents can damage or destroy our living space, whether it's a flat, a house, apartment or cottage, together with the things that are in them. According to Mr. Hochfelder when these small costs are added together, you can hardly put them on the household budget.
Vacation houses where we don't spend as much time as in apartments or houses, can also lead to malfunction and damage.
Another misconception that Adam points out is that insurance covers only the roof and the walls, but the real package can provide us with all that is in the area, including installation, equipment, things, and people who find themselves with us.
In order to avoid additional costs that might appear from such situations, Adam Hochfelder shared several solutions addressing real estate risks and how proper execution could save you a few dollars.
Coinsurance clauses, often found in property policies, restrict loss recovery if the limit of insurance purchased by an insured is not at least equal to a specified percentage of the value of the insured property. This approach can save significant amounts of money.
Quantification of risk through modelling for catastrophes is another option suggested by Hochfelder. Many standard property policies contain certain limitations of coverage if a building is vacant for more than 60 days. Reduced coverage normally applies when vacancy levels reach 31% for more than 60 days.
And last but not least, he recommends eliminating subcontractor warranties and limitations. This important exercise is often neglected but conducting a thorough review of the general liability policies could identify any exclusions or warranties relating to construction, repair or renovation work for the owner by contractors.