Kiplinger Business Resource Center recently featured an article concerning auto insurance fraud and its correlation to economic downturns. I immediately saw a frightening correlation to legal problems for real estate investors, and I’d like to bring it to your attention.
As it was used in the Kiplinger article, “Auto Insurance Fraud” refers to the act of purposely staging traffic accidents in such a way that it appears the perpetrator is not legally at fault. The perpetrator’s intention is to collect money from their victim’s insurance coverage, sue their victim for a large judgment, or both.
As real estate investors, this type of thing is particularly significant for us. The reason is this: Even if you’re a brand new investor with only a single property or two “under your belt,” you still have assets exposed to the threat of frivolous litigation.
With a single lawsuit from some nutcase who victimizes you by staging a car wreck, the cash you’ve earned and the equity you’ve built can be ripped away in a second.
This is something that you should be thinking about: What small steps will you take to protect my assets – whether real estate related or otherwise – during this economic downturn?
Your thoughts and comments are welcomed. Thank you for reading RealEstate.BryanEllis.com!