Insurance when taking subject to - Posted by David Fabian

Posted by clay on December 10, 2000 at 21:15:43:

I would change to my regular agent. However I would get your seller to put the rd policy in his name and list you as additional insured.

Insurance when taking subject to - Posted by David Fabian

Posted by David Fabian on December 10, 2000 at 20:45:17:

We have 2 properties now that have been deeded to us with existing loans & insurance in place. I have been blowing off the insurance issue, but need to get it addressed. Does anyone change carriers on properties you take subject to? We have all regular rentals (financing in our name) insured with Nationwide. Or do you leave the insurance on the house with the existing insurance company?
The policies that are currently in effect are set up for owner occupants.
If we leave the existing policy in place and add our name as “additional insured” can they deny a claim because it’s being used as a rental?

Re: Insurance when taking subject to - Posted by B.L.Renfrow

Posted by B.L.Renfrow on December 11, 2000 at 19:59:18:

I usually just leave the existing policy in place, but – and this is important – you have the seller notify (by writing the letter yourself and having the seller sign it) the insurance company that title is being transferred into an intervivos trust, and the policy should be changed to reflect the loss payee as “John Doe, as Trustee of the 123 Main Street Trust and the beneficiaries as their interests may appear.”

PLUS you have to have them change it to a landlord-type policy. If you simply leave the homeowner’s policy in place, and there is a loss, and the insurance company discovers it wasn’t owner-occupied, they will deny the claim.

This is recommended by Bill Bronchick and my own personal insurance agent. Of course, I’ve not had to file a claim on any of my trust properties, so it might not go so smoothly in practice.

The other option is to simply purchase a separate policy.

Brian (NY)

Re: Insurance when taking subject to - Posted by Dave T

Posted by Dave T on December 11, 2000 at 18:15:42:

Why not treat this just like an investment rental that you own?

You (through your trust) purchase a landlord (fire and hazard) policy. Have your tentants purchase their own renter’s insurance to cover their contents.