Posted by Kathleen Cory on March 14, 2002 at 21:19:31:
Thank you for your thorough explanation. This was my first MH deal and I needed to be sure I was approaching it fairly.
Your explanation also cleared up my own questions (misunderstandings) about my policy on my apartment buildings. Thanks!!
Insurance question?? - Posted by Kathleen Cory
Posted by Kathleen Cory on March 12, 2002 at 19:53:06:
Hi all! I have a buyer who objects to putting me as the named insured on my required insurance policy. She is concerned about her own investment , not to mention personal coverage of belongings, etc.
I really understand her point because I am purchasing two apartment buildings by land contract and I feel vulnerable also, because the seller is the named insured. What happens to the purchaser in the event of a fire or other loss? (besides having to trust the integrity of the seller)
My understanding is that the insurance payment would be used to finish paying off the owed amount to clear the debt, but then what? How is the buyer able to recoup all he/she has invested?
She is suggesting two separate policies on the same MH. One for her and one for me.
I like to use Lonnie’s model in everything, but not sure of this one point. Any thoughts?
Thanks.
Re: Insurance question?? - Posted by Tony-VA
Posted by Tony-VA on March 13, 2002 at 06:26:33:
Karl is right.
If your Buyer is concerned about you being the “Loss Payee”, then have that buyer check her car insurance. That auto policy is going to pay the lien holder first just the same as your policy.
Insurance is a matter of business. If your Buyer objects to how you do business than you have lost control of your deal. This is standard procedure.
The home is Your Investment, not your Buyers. You have the money in the deal, not them. They Owe You Money, not the other way around. It is up to you protect the money owed to you. That home is your collateral. Your buyer can insure it for any amount above the loan balance that they wish. That is not our concern. We just need the loan balance covered.
Tony-VA
Re: Insurance question?? - Posted by Karl (Oh)
Posted by Karl (Oh) on March 12, 2002 at 21:30:27:
If the home is going into her name, and you are the lienholder, you’re buyer gets her own insurance in her name, after all she is the owner, and lists you as the “loss payee” to cover the loan amount. She can insure the home for any “fair market value” above your loan amount. That’s what protects her equity. If something happens to the home, you are paid, and she gets whatever amount is left over. Also, most insurance policies will cover personal property in the home, above and beyond the home itself. This is how every single bank who loans on mobile homes does it, not to mention all of us, she can’t argue with the industry standard.
Karl Kleiner
Re: Insurance question?? - Posted by Kathleen Cory
Posted by Kathleen Cory on March 14, 2002 at 21:08:40:
Tony, thanks. You’re right about me having to keep control of the deal.
This lady also has changed the locks and doesn’t want me to have the duplicates. She says that if she ever defaults that I will have to break the locks to gain access. How’s that for attitude?
As far as the insurance question, I understand it more clearly now…about what the loss payee is on the insurance policy. Thanks again.