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January 23, 2013 / roqueagency

Real Property Exposed

Consider what your cash equity might be if you willingly decided to sell your home today. Simply put, this is a net dollars from the accepted sale price minus any mortgages and/or liens.  But what if you had to sell under less than favorable circumstances such as a job loss, a down economy, after the death of the main bread winner or to settle a legal judgement levied against you by a court?
In these unfortunate circumstances you might not have the luxury of waiting for the best sale price.  Could these selling conditions adversely affect the net value of your home?  Of course they could!  In one of these unfortunate circumstances, the net value of your primary residence could be at risk if you were to become subject to a liability judgement.  Let’s look at an example:

New Home ImageRon is single and a homeowner.  He’s worked hard all his life, recently purchased his first home for $90,000 with the $4,500 down payment he’d managed to scrimp and save over years of his early adult life.  It’s not a grand palace, but it is Ron’s castle and he’s proud of his little piece of heaven.  But one day, disaster strikes.  In a hurry and running late for work one sunny morning, he turns the corner, becomes blinded by the sun’s glare and collides with a Soccer Mom taking her two kids to school.  Mom sustains serious injury and the kids sustain several bumps, bruises and a couple broken bones.  Living as best he thought on a budget, Ron took the advise of an online insurance agent and secured the lowest auto liability limits required by law in TN, which are only 25/50 ($25,000 max per person / $50,000 max total per accident).  Mom’s injuries and medical costs exceeded $75,000 while the kids medical costs totaled an additional $25,000 and $15,000.  Ron’s insurance protection covered the kids’ medical expenses, but left only $10,000 in coverage to pay for Mom’s extensive medical bills.  The court ruled Ron was liable for the remaining $65,000 of Mom’s medical bills, lost work time plus their pain & suffering which totaled a $97,000 judgement.

In Tennessee, the state law provides for the net value of one’s home to be used in settlement of a liability judgement when that value is over $5,000 for an individual owner, $7,500 for joint owners and $12,500 for an owner age 62 or older.  Unfortunately, in Ron’s case, his accident took place during his sixth year of home ownership, after he’d built up a sizable balance of equity which is now at risk unless he can come up with the dollars to pay the court ordered judgement.  Ron may be forced to hurry and sell his little piece of heaven and all he’s work for, possibly at less than fair market value, in order to settle the $97,000 judgement from his accident.

Tragically, if you watch any TV at all you’ll know, this is a very real scenario in our world today and one of our primary concerns when discussing insurance protection with our clients.  It’s one of the driving motivations for our mission to, “Get more than you’re already paying for” here at Roqué Agency Insurance.

Google+Luis Roque is a local Independent Agent who strives to help you to “Be Protected, Not Surprised. Get More Than You’re Already Paying For.”
Roque Agency Insurance is located at…

150 Uptown Square, Suite C
Murfreesboro, TN 37129.

Or click here to call us at (615) 582-3382

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