Who is intilited to the insurance proceeds?
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UPDATED: Dec 8, 2011
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Insurance Question from Marion, IL
Asked on 12/08/2011
Who is intilited to the insurance proceeds? My grandma was selling our house contract for deed to her daughter and unfortantualy the house was destroyed by fire just 2 months ago .... well in the contract the 2 of them had it stated that the buyer(my aunt) was required to maintain the insurance to it full insureable value long story short my aunt had no insurance at all only my grandmother did and she want all my grandmothers insurance money! So who does it belong to?
Answer given on December 08, 2011
The insurance company will only give a policy to the person that has insurable interest in the home. It was unclear in your question whether the home burn down prior to the sale or after. If your grandmother still has an interest in the home (name on the deed, owns possesion of the home, etc) then your grandmother would be paid by the insurance company. If your grandmother has sold the home, then she would no longer have an insurable interest in the home and this may void the insurance policy. Therefore, I would be slow in mentioning this to the insurance company. Basically, if your grandmother still has an interest in the home, then the damage proceeds would be her’s to rebuild the home.
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