Land Contract & Insurance

Comments(7)

• 
  myfrogger13th May, 2004

  My first (and last) land contract we both carried insurance actually. I'm sure that norrist would say that wasn't the correct thing to do though.

• 
  Amelia85713th May, 2004

  Does that mean you had two separate policies?
  
  Amelia

• 
  Stockpro9913th May, 2004

  Actually double policies is not a bad idea. Or..... Put the property into a land trust and get one policy.
  [addsig]

• 
  Amelia85714th May, 2004

  The more I read about land trusts, the more I find that they are really wonderful things!
  
  Amelia

• 
  norrist14th May, 2004

  Frogger, you make me sound like the "insurance police" hahaha
  All joking aside, one concern of carrying 2 policies on the same property is that most policies have "excess" clauses. In other words, the policy will pay only excess amounts, if any other policy exists. If each of the 2 policies have such a clause it will create havoc in getting a loss paid...

• 
  Amelia85714th May, 2004

  Norrist,
  
  I thought this could be a problem with a double policy. One insurance company could point to the other company's policy, then both refuse to pay. What do you recommend?
  
  Amelia

• 
  norrist14th May, 2004

  The property, since it is now, I assume, not "owner-occupied" needs to be written on a "landlord" type policy. 2 options:
  
  1. You insure it as the 1st named insured and name the "owner" as an additional insured and loss payee (almost as if they are the mortgage company...for that matter they may be, if owner-financed).
  
  2. The owner needs to have the property re-written on a "landlord" policy. They would be the 1st named insured, and you would need to be at least an additional insured (for liability protection benefit). If you have any vested interest (such as rehab value) you should also be a "loss payee", for at least your vested value in the property.
  
  I prefer option 1 as you are the primary policy beneficiary. If the roles were reversed (you are the lessee/property owner) I would also recommend option 1, for the same reasons.
  
  Though the article link here pertains to the sub2 scenario, it may help:
  
  http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=472
  
  Best regards,
  
  Tim[ Edited by norrist on Date 05/14/2004 ]