Renton, WA · Member since 2009 · 127 posts · 15 votes
As far as I know, you're required to carry homeowners insurance when you have a personal residence.
If I, as an investor, acquire a property subject to owner's existing financing, what about their homeowner's insurance? If something happens, would they really cover something that happened to "homeowner's investor's tenant"?
How do you go about properly handling insurance in sub2s?
Residential Real Estate Broker · Payson, AZ · Member since 2009 · 3k+ posts · 1k+ votes
17y
Get your own insurance. Cancel the existing insurance and place your own on the property. The name on the title should match the insured.
There has been other discussions about this in previous threads, do a search and you'll see some different opinions. As far as I'm concerned I own the property therefore I'm going to make sure I'm covered.
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
17y
I would have them name you as an additional insured so you would be notified if it was canceled - without that you have no clue if they cancel it.
Also - yes - their insurance would cover the structure but not your personal belongings you would still need renters insurance for your personal property.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
The mortgage company is escrowing the insurance payments and then paying them directly to the insurance company when they're sent a bill. You would just get the new insurance, tell them the name and contact info for the mortgage company, and they would send the information about the insurance and future bills to the mortgage company.
You will almost certainly have to pay out of pocket for the first years coverage on the new policy. You do that on a normal transaction as part of the "prepaids". Its customary for 14 months of insurance premiums to be on the closing statement. Twelve months goes to pay the first year and the remaining two months go into escrow.
When the old policy is canceled, a refund check goes back to the old policy holder.
If you look on the mortgage statement, there will be info about where to send insurance information. Just pass this along to your insurance agent, and they will set it up directly with the mortgage company. They do this every day.