Home and real estate prices certainly aren’t increasing like they were during the early stages of the coronavirus pandemic, but at the same time, you only need to take a stroll down the egg aisle at the grocery store to be reminded that inflation is still a real issue facing Americans. It’s great when the value of your commercial property increases, but at the same time, this can lead to some unexpected issues with your property, including how it is insured.
For example, let’s say that you purchased a commercial property for $150,000 and had it insured for its full value. A couple years down the road, the value of that commercial space has significantly increased, and it’s now worth $300,000. That’s great if you decide to sell, but what if someone makes a legitimate claim on your title? You will be protected if you have an owner’s title insurance policy, but you may only be protected up to the original amount. That policy may only cover half of the current value of your property, causing your finances to take a major hit.
The good news is that inflation isn’t a new issue, and there are ways to protect yourself from an problem if your property value rises and you no longer have adequate title insurance coverage.
Don’t leave yourself exposed to unnecessary risk because your title insurance policy no longer provides enough coverage. You hope to never need to fall back on this policy, but if you need to, you want to have enough coverage to account for increases in your property’s value. Let us be your guide throughout this process and ensure your assets and finances are protected. For more information, or for help with a different aspect of commercial property management, reach out to the team at Commercial Partners today at (612) 337-2470.