Market Value Rider
Today's email is to tell you more about the "Market Value Rider" to the Owner's Policy. This rider increases the coverage for your client up to the fair market value at the time of loss. As an example, if you paid $750,000.00 for a property 5 years ago and the fair market value is now $1,000,000.00 you would only be allowed to file a claim for a maximum amount of $750,000.00 , unless you purchased this rider (then you can file the claim for $1,000,000.00). With real estate prices continuing to increase, this rider provides a high amount of coverage to your client at a low cost.
Cost:
- The cost is based on 10% of the straight premium rate.
- As an example, a property with a $750,000.00 purchase price, the premium is $2,836.00, the Market Value Rider cost is $284.00.
Requirements For Issuance:
- This endorsement is required by law to be offered to purchasers of owner-occupied, primarily residential real property with a maximum of four (4) dwelling units.
- Homeowner must be a natural person, not an entity.
This endorsement cannot to be issued to a purchaser at a foreclosure sale where the bid is below market value, unless the amount of insurance purchased approximately equal to the current market value of the property.
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