My guess would be you have a landlord policy with you as the primary them as additionally insured or you have a homeowners policy and they have their own renters insurance. Technically they are renting until they excercise their option to buy.
It would depend on how you write up the LPA. I have only done one LPA, and I wrote it up that I continued to pay the insurance premium until the option was excersised. That way, I know it was paid and I was the insured.
You could have them pay for it naming you as the primary insured with the coverage that you are comfortable with. Have them provide you a copy of the paid receipt, and a copy of the Policy, as well as to be sure that you are on the mailing from the insurance company.
Oh Ya, when I paid for it, they actually paid for it in increased monthly rental, but I had the control.
I would think the seller would have insurance on the property or structure and the buyer would have one on their personal possessions, since they are not owners yet then it would be renters insurance.
The insurance policy is commonly a responsibility of the one who make the payments on the mortgage. Beyond that unwritten standard, it's all negotiable and agreeable but as I sad earlier normally, for as long as the tenant is a step short of making good on the option to purchase RE, you or the original owner will make payments on insurance policy.
If you (or your entity) own, or have a financial "stake" in the property, be the "first named insured". The first named insured is the primary recipient of any potential claim benefit or liability
protection. An "additional insured" will garner liability protection only. A "loss payee" will have it's interests protected in the event the property itself is damaged. (A mortgagee is inherently BOTH). If you decide to keep the "homeowner's" policy in place and be named as the additional insured, be advised. If it is discovered that the ex-owner, the first-named insured in this case, no longer owns the property, expect the insurer to deny based upon the fact the policyholder no longer owns the property. Even if you manage the claim to be paid, you are not the entity to receive the proceeds, as you are not the first-named insured. If you did attempt to be added as a loss payee as well, chances are the insurer will question the necessity for you being named as such. When the insurer discovers you now own the property, they will need to write a new policy.
The proper way to insure the property, once you (or your entity) own it, is to have a non-owner occupied "landlord" policy, with you as the new first named insured. The bank/mortgage company is named, as normal, as mortgagee. The prior owner should be named as the additional insured ONLY. Naming the prior owner as additional insured will usually keep the mortgage company happy.
Hope this helps. Tim [ Edited by norrist on Date 02/16/2004 ]
HI Everyone,
After readying these threads I'm
realy confused.What do you do with the www.insurance.T/B I have in my contract must buy
renters www.insurance.I have just been paying
sellers www.piti.The way I see it it's between
the t/b and seller.Does anyone know the correct answer.
Don't know if I am clear on your post, Joseph. Rule of thumb: You own it, you insure it. Anything else is taking a chance on coverage when you need it.
If you are doing a L/O purchase you are not getting financing. If there is existing financing the lender will require that they be first on the policy. You are not going to change that. You can be named after them if you really care. As you likely have little equity initially I would not be concerned.
If you are the one renting the place and you are already on the title with a loan, again you will need insurance but you will need to be responsible for the insurance remaining in good order.
In all of the above, how the money is funded can be part of the deal. Who controls the policy should be the person still at risk to the lender.
John
BTW - Make sure your option remains after a fire has destroyed the home if you are the buyer. You can agree that the lease stops (at least the payments) but you want to retain a stake in the property. When the owner goes to rebuild they will need to pay you off or otherwise agree on how the option will be cleared before they can obtain new financing. If you are the owners and renting on a L/O consider the opposite.
My guess would be you have a landlord policy with you as the primary them as additionally insured or you have a homeowners policy and they have their own renters insurance. Technically they are renting until they excercise their option to buy.
JIm
Good Day to you:
It would depend on how you write up the LPA. I have only done one LPA, and I wrote it up that I continued to pay the insurance premium until the option was excersised. That way, I know it was paid and I was the insured.
You could have them pay for it naming you as the primary insured with the coverage that you are comfortable with. Have them provide you a copy of the paid receipt, and a copy of the Policy, as well as to be sure that you are on the mailing from the insurance company.
Oh Ya, when I paid for it, they actually paid for it in increased monthly rental, but I had the control.
Good luck and make $$$
Tom
I would think the seller would have insurance on the property or structure and the buyer would have one on their personal possessions, since they are not owners yet then it would be renters insurance.
Just my two centavos
Gonzo [ Edited by Gonzo on Date 02/16/2004 ]
Thanks you guys , your information and opinons are helpful!
The insurance policy is commonly a responsibility of the one who make the payments on the mortgage. Beyond that unwritten standard, it's all negotiable and agreeable but as I sad earlier normally, for as long as the tenant is a step short of making good on the option to purchase RE, you or the original owner will make payments on insurance policy.
If you (or your entity) own, or have a financial "stake" in the property, be the "first named insured". The first named insured is the primary recipient of any potential claim benefit or liability
protection. An "additional insured" will garner liability protection only. A "loss payee" will have it's interests protected in the event the property itself is damaged. (A mortgagee is inherently BOTH). If you decide to keep the "homeowner's" policy in place and be named as the additional insured, be advised. If it is discovered that the ex-owner, the first-named insured in this case, no longer owns the property, expect the insurer to deny based upon the fact the policyholder no longer owns the property. Even if you manage the claim to be paid, you are not the entity to receive the proceeds, as you are not the first-named insured. If you did attempt to be added as a loss payee as well, chances are the insurer will question the necessity for you being named as such. When the insurer discovers you now own the property, they will need to write a new policy.
The proper way to insure the property, once you (or your entity) own it, is to have a non-owner occupied "landlord" policy, with you as the new first named insured. The bank/mortgage company is named, as normal, as mortgagee. The prior owner should be named as the additional insured ONLY. Naming the prior owner as additional insured will usually keep the mortgage company happy.
Hope this helps. Tim [ Edited by norrist on Date 02/16/2004 ]
If my name is on the title I don't cancell my home owner's insurance policy until the cashiers's has cleared the bank.
That's just me
Lori
[addsig]
HI Everyone,
After readying these threads I'm
realy confused.What do you do with the www.insurance.T/B I have in my contract must buy
renters www.insurance.I have just been paying
sellers www.piti.The way I see it it's between
the t/b and seller.Does anyone know the correct answer.
Don't know if I am clear on your post, Joseph. Rule of thumb: You own it, you insure it. Anything else is taking a chance on coverage when you need it.
Lets be clear here.
If you are doing a L/O purchase you are not getting financing. If there is existing financing the lender will require that they be first on the policy. You are not going to change that. You can be named after them if you really care. As you likely have little equity initially I would not be concerned.
If you are the one renting the place and you are already on the title with a loan, again you will need insurance but you will need to be responsible for the insurance remaining in good order.
In all of the above, how the money is funded can be part of the deal. Who controls the policy should be the person still at risk to the lender.
John
BTW - Make sure your option remains after a fire has destroyed the home if you are the buyer. You can agree that the lease stops (at least the payments) but you want to retain a stake in the property. When the owner goes to rebuild they will need to pay you off or otherwise agree on how the option will be cleared before they can obtain new financing. If you are the owners and renting on a L/O consider the opposite.