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Who collects insurance compensation if the damaged property is sold? | Real estate insurance coverage law blog



When properly documented and planned, the sale of a damaged property does not create an opening for the insurance company to avoid liability from its insurance obligations. When you sell your property during a pending insurance claim, the policyholders can transfer the claim to a new buyer or retain their right to receive insurance benefits during the insurance.

In Florida, insurance claims after loss can be transferred and can be included as part of the sale through a document called "Allocation of Benefits". When you sell your property with an open insurance claim, it is good to fill in a seller's information form that clearly documents to the buyer that there is a repaired damage to the property. Notice of an open insurance claim should also be given to the buyer as it may affect their ability to obtain a new insurance policy while there is an open claim. Assigning your insurance claim to the new buyer of the property means that they can take over the damage and receive the insurance compensation directly from the insurance company.

Another option policyholders have when selling their property during an ongoing insurance claim is to sell the property for a reduced amount. It is crucial that the policyholder includes how much they reduce the price of the property due to the unrepaired damage in the sales documents. This will help establish a more accurate estimate of the cost of repairs and support the basis for the reduction in revenue. By using a seller's information form, it will be described that the buyer was noted about the damage at the time of sale and that the cost of repair was thought of in the reduced sales price. Policyholders should have a line estimate to verify the repair cost to determine the actual cash value of the damaged property.

If your insurance company questions coverage for the cause of the loss, you may also want a qualified engineer to inspect your property before the sale. Once the property has been sold, the policyholder may not be able to evaluate the damage after the new buyer has started repairing. Therefore, it is important for the policyholder to collect all the necessary documentation to prove their claims before selling their property.

Today's Thought: "No matter what people say to you, words and ideas can change the world." ̵

1; Robin Williams, Dead Poets Society .


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