Minimizing Risk with the Right Insurance

 

“There are a lot of ups and downs, but you can ride them out if you’re prepared for them. (see Action Steps)

 “Learning to expect problems saved me from a lot of wasted energy, and it will save you from unexpected surprises. It’s like Wall Street; it’s like life. The ups and downs are inevitable, so simply try to be prepared for them.

 “Sometimes I’ll ask myself why I want to take on some new, big challenge. A substantial loss is always a possibility. Can I handle it if it doesn’t go well? Will I be asking myself later, Why did I ever do that? What was I thinking? I’m actually a very cautious person, which is different from being a pessimistic person. Call it positive thinking with a lot of reality checks.”

— Donald Trump in Trump: How to Get Rich by Donald J. Trump

with Meredith McIver (Random House, 2004).

 

Insurance can be a real estate investor’s best friend. If your building burns down or is swept away in a flood, insurance will protect your investment. If a visitor falls down and gets hurt on one of your proper­ties, insurance will prevent you from paying the high costs of any legal judgments against you.

While insurance is your friend, it is also a very costly companion. The safer you want to be, the more you have to pay. (see Private Mortgage Insurance , Title Insurance)

To further complicate matters, a property investor needs to know about the many different kinds of insurance on the market. In this chapter, we’ll cover what you need to know.

 

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