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L/O Insurance Question

Red12 profile photo
  • Friday, January 21, 2005 @ 07:45 PM EST
  • 8 Comments

My seller asked about her agent about a new rental dwelling policy naming me, her, and the bank as insured parties. He told her that she couldn't have me named as additionally insured.

What do I do now? Shop for a policy on my own and take it out on the property (I can obtain a limited P of A)?
If so, who do I name as insured/payee?

Thanks for helping another newbie!
[addsig]

Comments(8)

  • LeaseOptionKing
    LeaseOptionKing20th January, 2005

    Ask to speak to the agent yourself. Someone isn't being entirely truthful with you.
    [addsig]

  • Red12
    Red1220th January, 2005

    Thanks LOK. I suspect that the agent is just naive/uneducated on anything "creative". I take it from your response that the way I attempted it first is the way that I should pursue it.

    If I get nowhere with this agent, what then?

    Thanks,
    Richard

  • norrist
    norrist20th January, 2005

    This article on insurance and sub2 should help clarify your L/O insurance dilemma:

    http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=472

    Best regards,

    Tim

  • Red12
    Red1221st January, 2005

    Thanks,
    That's written from the "subject-to" standpoint. Anything that I should do differently in a L/O since I won't have the deed?

    Richard
    [addsig]

  • LeaseOptionKing
    LeaseOptionKing21st January, 2005

    With a L/O, you have to settle for being additionally insured (preferably on a landlord policy, but I don't make that a deal-breaker). Normally, it can be done right over the phone and never costs the Seller anything. You should mandate that you receive a copy of it. I find it suspect that an insurance agent would not know something as basic as this. I would lean more towards the Seller not actually asking for it and saying that he did.
    [addsig]

  • Red12
    Red1221st January, 2005

    Thanks, LOK.

    If the seller weren't my sister, I'd suspect she didn't ask also. Either the agent is an idiot or she didn't ask him the CORRECT questions and confused the whole issue. Since this is my first deal, I didn't know enough to help straighten it out.

    If I get nowhere with this agent, should I get her to go shopping for a new rental dwelling policy or get a Pof A and do it for her? :-?
    [addsig]

  • LeaseOptionKing
    LeaseOptionKing21st January, 2005

    The agent probably misunderstood.
    [addsig]

  • norrist
    norrist21st January, 2005

    LOK is right on. If you have any exposure on the property such as rehab or addition/improvement value, get a "Loss Payee" endorsement as well.

    Have a great weekend!

    Tim

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