Dealing With Insurance

Let’s take a look at someone dealing with insurance on a property…or lack of it. Say you received the deed recently on a property worth about $675,000. You thought you had a buyer for it so you went ahead and recorded the deed. But now you have a problem. You don’t have insurance on it. You don’t have a lot of money in it though. Should you be worried? Should you buy insurance for yourself?

You certainly should. Right now it's technically not insured. That’s right. We’ll say that again. Right now…it’s technically not insured.

It needs to be insured so that if by chance, it burns to the ground-you’re covered. What if there was an accident there and something happened and trust agreement showed up with the old owners name as the beneficiary?

First of all we don't know why you'd want to trust an agreement with the seller’s name as beneficiary. If it's an accident then property owners are probably going to be sued. And we can assure you that if the owner's who have a policy on it find that out- you have a big mess.

Now we are not telling you that if the seller applied to the insurance company for payment that the insurance company wouldn't pay it (because they don't general check the title). But if the insurance company were to find out that the property did not belong to that seller any more, they could go back after that money at a later date; not a situation we recommend getting into.