Insurance claim right before sale?

4 Replies

I've got a property that I submitted two vandalization claims for.  At the time of the second claim, I received notification that if I file a third non-weather related claim within the next two years, I will lose my coverage.  

The house was just vandalized again, and all the newly installed electrical system was ripped out (along with the security doors I had installed after the last time).  I decided to sell the property (yes, the buyer knows the background) and have it under contract to close this Friday.  But I really want to get the insurance money for this last vandalization, cuz it was a few thousand dollars of work that was destroyed.  

So my question is, can I file the insurance claim when I'm selling the property? I want to file as late as possible, because I will lose my coverage, and want to be covered in case they break in again and burn it down or something. (which would not at all surprise me, and I'm not even sure I would mind, as long as I have coverage).  So what's the best way to go about this?

I just want to note that insurers look at loss history of an individual when making claims. So your coverage could be affected for future policies that you take out on other properties either with premium or not being covered. What is your deductible and what is the total cost to make repairs? If that amount is $xxxx, is that amount worth affecting your insurability for future properties? Would you be seriously financially burdened if you didnt make a claim or do you just want to money because you have insurance and want to be made whole no matter if its your first or 3rd claim? Not trying to be judgemental. Is the seller buying it as-is or are you expected to restore the damage to pre-vandalized state? That would be another factor with deciding what to do with insurance on whether repairs become your problem or the sellers problem. If seller takes responsibility, let them deal with it and allow you to avoid making further claims.

on another note, wow. Electrical wiring theft? twice? Thats cold.. 

@Jeff Bridges that's a good point about them looking at my history.  I've got other properties that I've never filed a claim for, because they're in better neighborhoods (sidebar: lesson learned!) So wouldn't the location count more for future policies?

The total of this claim would be about 7k.  I need that money to avoid taking a loss on the property.  I am selling as is, but obviously the price I am able to command is impacted by the this. 

Rivy,

If you file the claim they will not be able to cancel you that day.  There are state laws the govern how much notice they have to give you.  There are usually different guidelines depending on what the reason is (non-payment, Material change in the risk, ineligible due to guidelines, etc.).   Contact your agent or the state ins dept to find out the applicable amount of time they have (may not be able to cancel until renewal) 

@John Mocker Thank you! I was not aware of that.  I am reaching out to my agent now. 

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