Insurance Question
I am trying to buy properties sub2 to rehab and sell. My concern is how do I insure the property. Should I get my own policy or should I be listed on the mortgage holder’s policy. Is there a generic form for power of attorney for this?
Thanks in advance.
Doug
You do not want to just add yourself to their policy. If the house burned down the day after closing, the seller would actually get money.
You want to get the seller to give you a statement to their lender that says you have changed insurance policies. Make sure you have your new policy in place prior to sending in this statement.
As for how to structure the new policy, make sure the mortgagee is listed, you as the main beneficiary, and have the seller's name on there as the junior beneficiary (whoever gets paid last and least). If you don't have the mortgagee listed, they are gonna be very unhappy, and if you don't have the seller, they might consider this a sign the house has been sold.
mwinburn:
Can I ask if you've done this yourself?
I've been working this same problem and would like to know your mortgagee's reaction to having the named insured (your seller) moved down to additional insured, with you (or your entity) put in its place.
Are you saying this **won't** trigger the DOS (that you've heard or read about) or are you saying it **hasn't** triggered the DOS for you (in your own deals)?
Also, how many times have you done this (just trying to get an idea if most lenders will accept this or just a few)?
Thanks,
andy
[ Edited by arytkatz on Date 03/15/2004 ][ Edited by arytkatz on Date 03/15/2004 ]
Doug,
This may help:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=472
Tim