Need help with home insurance please.

shadowwalker · #1 05/15/07, 06:29 PM

We are buying our place on contract for deed. The owner said the insurance was going up because of his business partners accidents over the last year. And that they use a umbrella type insurance for all their businesses. I was wondering if anyone else has this arrangement and has insurance. The problem I guess from the insurance companies around here and on web is that we are not on a deed of some kind. We are on a promisary note. They don't recognize one of these.
We have been paying it through the owners and we carry our own rentors insurance on our possesions. Just thought I might find help here. Thanks in advance.

chickenista · #2 05/15/07, 07:27 PM

I am not sure about any of that, but you may want to run it all by your local Farm Bureau Insurance rep. They are very easy to work with. I was impressed. They are lenient.

Junkmanme · #3 05/15/07, 07:43 PM

You should be able to get insurance on your own for the place. You have an "insurable interest". The insurance company will probably request a photocopy of your "land contract" in order to document an "insurable interest". You should not be penalized (higher rates) for previous owners risks.

Also, when you get your own policy, a copy of it should go to the person you are buying from, just as it would to a mortgage company. Also, if there is also a mortgage holder, they should get a copy also.

(I used to own/operate my own Independent All-Lines Insurance Agency.)

Just shop around and buy from an Independent if you can. Better Service...More Product knowledge!

Good Luck!

Bruce

donsgal · #4 05/15/07, 08:03 PM

Quote:

Originally Posted by shadowwalker

We are buying our place on contract for deed. The owner said the insurance was going up because of his business partners accidents over the last year. And that they use a umbrella type insurance for all their businesses. I was wondering if anyone else has this arrangement and has insurance. The problem I guess from the insurance companies around here and on web is that we are not on a deed of some kind. We are on a promisary note. They don't recognize one of these.
We have been paying it through the owners and we carry our own rentors insurance on our possesions. Just thought I might find help here. Thanks in advance.

A land contract or contract for deed is basically a promissory note. You are promising to do something (pay) and the owner of the property is promising to do something (sell you the property when the conditions of the contract have been satisfied). The owership of the property remains in the sellers name until this happens. His name is on the deed.

On contracts for deed that is just how it goes. You are at the mercy of the seller and whatever insurance he chooses. It's all part of the concessions you must make to have him carry the note for the financing of the property.

I suggest that after a couple of years of making good, solid, on time payments and saving up 20 percent of the purchase price of the home, that you seriously consider conventional financing, it is better for you all the way around.

donsgal

Hoop · #5 05/15/07, 08:13 PM

Nothing unusual about a land contract.

Whats unusual is the seller purchasing the homeowners insurance. This should be the responsibility of the homeowner.
There are 100's of insurers out there that want your business. The land contract thing is insignificant.

Wolf mom · #6 05/15/07, 08:16 PM

Please follow donsgal's advice.
Land contracts are illegal in AZ due to being at the mercy of the seller with little recourse.

AZ has a long history of bad real estate deals & dealers but it's changed now & after tightening the laws, this is one of them.

shadowwalker · #7 05/15/07, 08:32 PM

I had farm buearu insurance for over 19 years in wyoming. I moved to tennessee and the rates over trippled on autos and the three different offices wouldn't even talk to me about it .So I cancelled and went with another company that dosn't insure houses.And even cheaper than in wyoming. I waited over four weeks for agents at three different offices to even return our calls. I mean between me and wife over 20 calls total. I have spent almost 25 days trying to get insurance. I have called the locals in four counties. Tried on websites, ect. No one wants to follow through to make a sale and get a customer. And we have good credit, so that's not it. So I was asking here.

pancho · #8 05/15/07, 08:35 PM

Just one of the problems that come up with a contract for deed. there are others that can be a lot worse.

Junkmanme · #9 05/15/07, 08:47 PM

Donsgal is INCORRECT !

If you are wanting to get your own insurance, you can do this. Go see an Independent Insurance Agent. Take along your copy of your "Contract for Deed" so that the agent can photocopy it.

Believe me, I know what I'm talking about here. Myself and another fella (a lawyer) wrote the Exam for Multi-Line Insurance agents for the State of Colorado.

Be sure you are right, then go ahead!

Bruce

themamahen · #10 05/15/07, 08:50 PM

I bought a contract for deed house and DID INDEED have MY OWN insurance policy...

Shadow · #11 05/15/07, 11:13 PM

Thats the problem with getting your own insurance on a contract for deed. I can not get insurance on your home, car, whatever. In most states you can not insure thingsyou do not own. We have sold several pieces of property using contracts for deed and never a problem. Most have evertually got financing we still have two that will never have the credit to do so. But they are over half way to owning their own home. Best thing for both of these parties is they can not borrow money against their homes, because it is still in our names. Once they pay us off they both will probably lose it by borrowing more than they can handle. But that is just that way.

Junkmanme · #12 05/16/07, 07:25 AM

A Person buying on "Contract for Deed" or "Land Contract" DOES OWN! They have an "insurable interest" in the same manner that a person with a standard mortgage does. Both are accruing EQUITY as they make their payments. (There ARE "paperwork differences" relating to default, etc.)
Just because you have bought a house with a mortgage, do you "OWN" that house? Yeah, I suppose....but the REALITY IS, the Mortgage Company has the MOST EQUITY (usually--at least in the early years.)
A "Contract for Deed" transaction is similar....You build EQUITY! This is INSURABLE!

Not only that, but the Buyer on the "Contract for Sale" OWNS "future appreciation", etc. as long as the Buyer is fulfilling the Contract as written.

These are Insurable Interests !

Do your homework!

Bruce

Shadow · #13 05/16/07, 10:23 AM

Yes you have equity, and it builds as you pay the principal and any appreciation is yours, but the owner recorded at the court house is the person of record, and is the person liable for personal lawsuits for injury on the property. Also in Alabama the owner of record is the only one who can purchase insurance, not the future owner. I know this is one of the problems that people have with contracts for deeds but if I am responable for the risk I will say what insurance company will be insuring me. Not necessarry that it be the cheapest but the best. All insurance on property is to be approved by me, you can select the insurance company but it has to be for the amounts that the insurance had specified that I had on it. And the insurance company has to have a good rating and it can not be Alfa, personal experience with them.

Jerngen · #14 05/16/07, 11:18 AM

We did our Land contract in MI (2001) with no problems. Recorded it with the title office and city. Called my independent insurance agent (always use one who works with multiple companies) and she gave me a number of quotes.
Once we had enough equity built up (summer 2003) we went ahead and did conventional financing.

shadowwalker · #15 05/16/07, 12:55 PM

Thanks for the other ways to go about this.
Bruce, why so anal? I was just asking a question. Maybe everbodies not a smart as you are?

Junkmanme · #16 05/16/07, 02:16 PM

Thanks for the other ways to go about this.
Bruce, why so anal? I was just asking a question. Maybe everbodies not a smart as you are?
__________________
I was trying to HELP YOU. I don't care much for misinformation that is expressed as definite truth. You got a LOT of bad information on this thread.
I apologize for bothering to explain the realities.

-Not everybody is as smart as I am.....and not everybody is as dumb, either.

Good Luck with your insurance problem.

Bruce