Property Management
A NJ property manager should recommend that their owner client obtain 'umbrella' insurance coverage because:
AIt is required by NJREC
BUmbrella policies provide an additional layer of liability protection above standard property and general liability policy limits✓ Correct
CIt is less expensive than standard coverage
DNJ weather requires it
Explanation
Umbrella insurance provides excess liability coverage beyond the limits of standard property and general liability policies, protecting property owners from catastrophic lawsuit judgments that could exceed primary policy limits.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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