Does an insurer have to pay the mortgage holder of a property destroyed by fire even if it was not named as an additional insured?

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Does an insurer have to pay the mortgage holder of a property destroyed by fire even if it was not named as an additional insured?

It was required in sales contract that I, as mortgage holder, be named as loss payee however, mortgagee neglected to do so. Property was destroyed by fire and now I am am not able to get insurance company to pay me. Is there anything I can do to get insurance to pay me?

Asked on April 1, 2012 under Insurance Law, South Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If the contract of sale that you entered into with the buyer required you to be a named additional insured under the homeowner's policy of the buyer and you were not placed on it but the new owner is getting a pay out by the carrier and not you, your recourse would be to file a legal action against the insurance carrier for an injunction as well as an action against the owner for breach of contract.

The injunction request would be for a court order that the carrier pay you the check. I would get a real estate attorney to help you right away before the check is issued by the insurance carrier.


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