Subject 2 Insurance Issue
I just closed my first subj2 last week and have a question on insurance. Initially, I had contacted the seller's insurance agent to request my entity be listed as additional insured. When the agent called the seller to verify, he told them there had been a sale, so now I am required to obtain a new policy. My question: how can I do this in the most discrete way possible without setting off alarms for the DOS police when they receive notice of change in insurance coverage (and probably also notice I am getting builder's risk insurance)? Any advice would be appreciated.
Check this:
http://www.thecreativeinvestor.com/ViewTopic15676-34.html
Thanks, norrist, there was some good information in that post. I took your advice and am having my agent draw up the new LL policy with my entity as primary insured, seller/former owner as additional insured, and bank as mortgagee. Now some logistical questions:
1. How do you inform the lender of the change in insurance so that the escrow can be updated? Do you simply allow your agent to handle this? What about cancellation of the old policy...since the agent on the seller's policy told me I need a new one, am I correct in assuming that he will take care of sending notice to the lender?
2. How can I find out what the new monthly payment will be? Since I'm paying the new insurance policy premium in one lump sum, I basically need to know what PIT is on the loan.
Thanks.
Quote:
On 2003-12-11 14:45, jmangan wrote:
Thanks, norrist, there was some good information in that post. I took your advice and am having my agent draw up the new LL policy with my entity as primary insured, seller/former owner as additional insured, and bank as mortgagee. Now some logistical questions:
1. How do you inform the lender of the change in insurance so that the escrow can be updated? Do you simply allow your agent to handle this? What about cancellation of the old policy...since the agent on the seller's policy told me I need a new one, am I correct in assuming that he will take care of sending notice to the lender?
He should. We simply name the mortgage company on the new policy with their correct mortgagee clause . We also usually name the party that held/holds the mortgage as additional insured and fax a copy of an insurance certificate to the mortgage company. This usually keeps them happy. We then send the cancellation request [(usually needs to be signed by the insured (seller)]. By cancelling a few days after the new one is in place, it tends to keep the mortgage company from getting discombobulated over the cancellation, as they already have a new insurance plan in place.
2. How can I find out what the monthly payment will be? Since I'm paying the new insurance policy premium in one lump sum, I basically need to know what PIT is on the loan.
Good question. You may want the seller to call the lender to get an amoritization schedule. This usually breaks down the PITI.
Thanks.
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Hope this helps. Tim