What to Consider When Buying a Property with an Open Insurance Claim

What Buyers Need to Know About Purchasing a Property with an Ongoing Insurance Claim

When buying a home, one of the important aspects you might encounter is dealing with an ongoing insurance claim. This scenario can present both opportunities and challenges for prospective buyers. Understanding the intricacies of purchasing a property with an active insurance claim is crucial to ensuring a smooth transaction and maximizing your investment.

How Assignment of Benefits (AOB) Affects Property Purchases

In many regions, Assignment of Benefits (AOB) allows homeowners to transfer the benefits of an insurance claim to a new property owner. Despite recent legislative changes in Florida, AOB’s remain legal when transferring claim rights from a seller to a buyer. This can be particularly beneficial if there are pending repairs that will be covered by the insurance policy.

If you’re considering purchasing a property with an ongoing insurance claim, it’s essential to understand how this transfer works and how it can impact your investment. For more insights on how selling a property with an ongoing insurance claim affects the process, you can refer to our previous article.

Key Considerations When Buying a Home with an Ongoing Claim

Before finalizing the purchase of a property with an active insurance claim, it’s crucial to thoroughly review the existing insurance policy and the details of the claim. Ensuring that the claim is valid, understanding the scope of the repairs or settlements covered by the policy, and knowing if there are any disputes with the insurance company are all critical steps in the buying process.

If the seller plans to assign the benefits of the claim to you, it’s important to ensure that the AOB is properly executed and documented. While recent laws in Florida have restricted AOBs for contractors and service providers, they are still a viable option for transferring claim benefits to new property owners. Properly managing this transfer can simplify the process of completing any necessary repairs after the purchase.

It’s equally important to ensure that the insurance claim is adjusted properly to reflect the true extent of the damage. Often, the initial offer from an insurance company may not fully account for the total loss or necessary repairs. This is where VIP Adjusting can step in to advocate on your behalf, working to maximize the claim settlement so that the repair costs are fully covered.

Challenges of Securing Insurance for Properties with Ongoing Claims

One of the significant challenges in buying a property with an ongoing insurance claim is securing new insurance coverage. Many insurance companies are reluctant to provide coverage for properties with open claims or unresolved damage. This becomes especially important if you’re using a mortgage to purchase the home, as lenders typically require proof of insurance. The presence of an ongoing claim or pre-existing damage can make it more difficult to secure the necessary coverage, potentially delaying the closing process or complicating the terms of your mortgage.

VIP Adjusting can assist with ensuring the claim is fully adjusted, providing the necessary documentation to help secure adequate insurance coverage and satisfy mortgage requirements.

Protect Your Investment and Maximize Your Claim with VIP Adjusting

Navigating the claims process when purchasing a property with an ongoing insurance claim can be overwhelming, but VIP Adjusting is here to help. Our Public Adjusters ensure that the insurance company fairly evaluates the claim and that you receive the maximum settlement for the damage. We thoroughly assess the loss, review repair costs, and negotiate on your behalf to make sure you're fully covered and avoid out-of-pocket expenses after the purchase. By guiding you through the entire process, we help protect your investment, so you can move forward without worrying about hidden repair costs or inadequate settlements. If you're buying a property with an ongoing claim or have questions about maximizing your insurance settlement, contact VIP Adjusting today to secure the best possible outcome.