Parties that might be affected by a property loss include the following:
· The property owner
· Secured lenders of money to the property owner
· Users of the property
· Other holders of the property
The Property Owner
When a property of some value is lost, damaged or destroyed, the owner of the property incurs a financial loss because of the cost of repairing or replacing the property.
Secured Lenders
When money is borrowed to finance the purchase of a property, the lender usually acquires some conditional rights to the property, such as the right to repossess the property, if the owner fails to make payments. Such a lender is therefore called a Secured Lender or a Secured Creditor.
When properties are made collateral securities to borrow money, the secured lender is called a mortgagee (or mortgage holder) and the borrower is a mortgagor.
In the event of a mortgage agreement, both the parties are exposed to loss. Property insurance policies generally protect the secured lender’s interest in the financed property by naming the lender on the insurance policy and by giving the lender certain rights under the policy.
Users of Property
Some event result in losses to users of the damaged property, eventhough, the users do not own the property. Payment of higher rent for alternate accommodation in the event of damage to the leased building by the user, etc., are all examples.
Other Holders of Property
Some parties are responsible for the safekeeping of property they do not own. Dry cleaners, TV repair shops, common carriers, and many other businesses temporarily hold property belonging to others. Holders of property entrusted to them by others are called Bailees.
Property Loss Exposures
