Insurance in buyer's name vs. treating as a rental - Posted by Burley Boy

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Posted by wwjmaj on October 21, 2003 at 15:28:23:

Why do you want to pay their premiums if you don’t have to? Why do you want to “account” for the insurance escrow and make sure you properly apply payment to late fees, insurance, interest and principal? If you are the endorsed lien holder you receive notice (in Michigan 30 days prior to cancellation) of nonpayment and then you can decide whether to take back the home for nonpayment of insurance before it lapses or pressure them to pay. Also if the insurance is yours, there will probably be no coverage for their contents in the event of theft or fire.

The simpler the accounting, the less bills I have to pay the better I like it BUT make sure you get that binder AND you respond to those thirty day cancellation notices.

Mark

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Insurance in buyer’s name vs. treating as a rental - Posted by Burley Boy

Posted by Burley Boy on October 21, 2003 at 11:02:39:

I just called my insurance agent to place two of my recent acquisitions in my name until I can resell on contract. My plan is then to rewrite the policy in the name of the buyer with myself in 1st lien position. (Just like I’ve learned from previous posts).

My agent suggested that a more cost effective way would be to keep the insurance in my name (much like one would do for a rental property), build the cost into the price and that way I would ensure that insurance was always on the home with no lapse in coverage.

Is this good, bad, or no impact?