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Coverage for Distressed Properties

The insurance industry is meeting the demand for coverage addressing risks associated with the large inventory of bank-owned residential properties, though commercial coverage is lacking.

“The good news is that the insurance marketplace has done a great job in providing capacity for the huge increase in residential foreclosures.”

Raymond Reed, Marsh

While the rate of foreclosures has slowed, the mortgage industry is far from out of the woods, with large inventories of distressed residential and commercial properties on their books. The insurance marketplace is providing sufficient capacity at aggressive prices for the tremendous increase in residential foreclosures, but capacity is lagging on the commercial side. Zions Bancorp facilitates the process of getting coverage, especially for commercial risks, by monitoring pending foreclosures and gathering underwriting information in advance for large commercial real estate risks that would exceed the bank’s master insurance program or for risks that would be considered going concerns, such as apartment complexes and hotels.

Copyright © 2012 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.

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