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,
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.