Lease Option Insurance Question - Posted by Phillip

Posted by Jim IL on January 15, 2000 at 12:46:36:

I sure hope this is the right way to do this, but here is how I handle that.
When I L/O a property, the contract states that I am to be listed as the “Additional insured” on the policy.
I then draft a letter for the seller to send the insurance company, have them sign it, then I mail it and fax it to the insurance company.
This way I’m sure it is done.
The contract also spells out what exactly each party is to do should there be a claim, and what responsibilities each party has.
IF there is a claim, then I have the option to accept the proceeds and keep my purchase option in place, or I can let the option go and walk away.

When I sell the place to a T/B’er, (get them to sign a lease and option agreement with me), I tell the T/B’er in the lease agreement to obtain renters insurance to cover there personal property.

Hope this helps,
Jim IL

P.S. I deal with insurance differently with other types of deals, like “Subject to’s” and “Land contracts”. There we get a power of attorney so that I can get the proceeds from any claims made.

Lease Option Insurance Question - Posted by Phillip

Posted by Phillip on January 15, 2000 at 10:17:22:

I need help in understanding how insurance works when doing a lease option. Okay, is it the potential buyer who is added as an additonal insured or me who put the deal together? If there is a loss no one but the owner of record is entitled to any proceeds from the insurance company, right? The tenant buyer has no say in how insurance monies would be allocated? Please help me understand how this works…


Check Bill Bronchicks Form - Posted by Jim LaVerdi

Posted by Jim LaVerdi on January 16, 2000 at 24:12:52:

If you check out the FREE Lease Option form on Bill Bronchick’s ( site, you will find his lease agreement form to be worded to provide what you need in regards to insurance. And as Jim IL stated, I would agree to tell my tenant buyer to obtain renters insurance to protect their personals.

Jim LaVerdi (Phoenix Arizona Investor)