An open insurance claim, in most cases, does not inhibit your ability to sell the property. There may be a number of reasons why a homeowner wishes to sell their home while the insurance claim is still pending. When doing so, here are some things to consider.
If you choose to sell your home and you have retained an attorney to handle your insurance claim, it is best to advise them of the potential sale and seek their input and advice prior to doing so.
Be open and honest with your realtor. Discuss the damages to the home and ensure that they are disclosed to any potential buyers. Sellers of property in Florida have an affirmative duty to disclose latent defects or damages that are not readily apparent and that have an impact on the value of property.
When selling the home there are two options. You can assign the benefits of the insurance claim to the buyer, or you can retain the benefits of the claim and reduce the purchase price. Each option brings different considerations. If you choose to assign the benefits of the insurance claim, have the assignment of insurance benefits agreements reviewed by an attorney prior to signing.
If you choose to retain the benefits of your insurance policy, you are likely going to be unable to recover the recoverable depreciation or Replacement Cost Value of the damages. A condition to this recovery is that once the home is sold, you’re incapable of doing the repairs.
Here are a few additional suggestions if you retain the benefit of your insurance policy.
- Clearly note how much you have reduced the sale price of the home in the seller’s disclosures form.
- Ensure that all necessary inspections are completed.
- Ensure that you notify the insurance company that you intend to sell the property and give them time to reinspect if they request to.
These are just some of the considerations one needs to take into account when selling property with an open insurance claim and is by no means an exhaustive list. If you are looking to sell your property and have an open insurance claim being handled by the Merlin Law Group, call your attorney today to discuss potential concerns.
For more on selling property with an open insurance claim, see Amy Currotto’s post, Who Collects the Insurance Claim Proceeds if the Damaged Property Is Sold?