What should be credited against the purchase price if the risk of loss has passed to the buyer?

When the risk of loss has passed to the buyer in a real estate transaction, the buyer assumes the responsibility for any damage or loss to the property. In this context, if the seller has personal insurance coverage on the property, it can potentially be used to cover the loss. Thus, any amounts that might be recoverable by the seller under their personal insurance would serve to reduce the financial burden on the buyer for the loss that has occurred.

This means that the seller's personal insurance could provide the buyer a form of compensation for the damages, and the amount received from the insurance can be credited against the purchase price, lessening the financial impact on the buyer.

Other options do not serve the same purpose in this scenario. Title insurance is generally meant to protect against defects in title and does not cover physical damage to the property. The original purchase price is not what is credited; rather, it's the money received from insurance claims that can offset losses. Prior encumbrances would not be relevant to the issue of risk of loss since they relate to claims against the property or ownership rather than damage to the property itself.