My financed buyer hasn't bought insurance

Sold a house on owner financing a few months ago, then I cancelled my homeowner’s policy.

Apparently there was some confusion with the buyer, because I said that I’d keep my policy for a month or so, and she thought I would keep the policy forever.

So it’s been a few months since I sold it and she has not insured the property. My insurance company has cancelled my policy and I can’t get it back because I don’t own the house.

I know I should have held up the deed until her insurance was in place–lesson learned. But what do I do now if she won’t buy insurance??

You have two options. Call the note due or get insurance on your own right. If she won’t get insurance then it’s really that simple.

If you loan package called for the borrower to carry insurance and she isn’t, then she is in default. Usually that means that you can actually make her pay for you (the bank) to carry insurance in her place. Call your insurance agent and let them know your position and that you need an insurance quote on the property. Mortgage holder insurance is usually high BUT the borrower is required to pay. Also, get a quote for her to carry home owners as well.

Then you can send her a certified letter informing her that she has 30 days to get insurance (and offer your agent’s quote) or that if it’s not in place, you will get your insurance (quote price) and add it to the monthly payment.

From that point, if she refuses to pay, the she is in default.