When purchasing a property, it’s important to consider obtaining hazard insurance before taking ownership. Even before the ownership papers are passed, the buyer has an insurable interest in the property as soon as the agreement of sale is executed by both parties. The agreement of sale should specify the amount of insurance coverage, which is important for both the buyer and seller.
Buyers should ensure that the insurance coverage is adequate and not simply listed as “as now insured,” which may indicate the seller’s reluctance to increase coverage. A good rule of thumb is to insure the buildings for an amount equal to the sale price minus the value of the lot. This can help protect the buyer’s investment in the property from unexpected hazards or damages.
It’s important to consider hazard insurance for a property before taking ownership. Once both parties execute the agreement of sale, the buyer has an insurable interest in the property. However, it’s common to wait until ownership papers are passed before obtaining insurance. The agreement of sale should specify the insurance coverage amount, which benefits both parties.
Buyers should make sure their insurance coverage is sufficient, rather than just accepting “as now insured.” The seller may be hesitant to increase coverage. It’s generally wise to insure the buildings for the sale price minus the lot’s value.
If you have any questions about Insurance Before Sale, you can contact us at +1(516) 829-2205 and +1(516) 647-4289. Additionally, you can find us on various social media platforms such as Google My Business Profile, Facebook, Twitter, Linkedin, Instagram, YouTube, and Pinterest.