Disposition of Insurance or of Proceeds Thereof

Disposition of Insurance or of Proceeds Thereof

When there is a sale made but before the deed has been delivered incase there is a fire or some casualty or even loss of property or even loss to the improvements which have been made, then an amount is adjusted which will be either equal to or less than 25% of the amount which has been insured which covers the casualty and the purchaser is then entitled to get credit for it. In case the casualty or loss is equal or exceeds 25% of the purchase price then the purchaser can opt to receive the insurance amount. However, this needs to be done in a stipulated and agreed upon time frame post the damages or losses are inflicted and the purchaser has been notified of the amount.

In such cases if the purchaser decides he wants to continue with the contract then the contract is extended by a certain number of days which is acceptable to both the seller and the buyer. The credit of the insurance money is also used so that the sum of the deferred payments is reduced pro rata basis. If the purchaser decides not to go ahead with the contract then the contract gets terminated and the loss or the damages are then to be considered as adjusted based on the contract when the insurers have agreed upon the amount and they are ready to pay the amount. Incase there is no insurance however, and the loss or the damage is more than 5% the purchaser can decide to terminate the contract.

(No Ratings Yet)

Sample Template Preview

Disposition of insurance or of proceeds thereof.

In case, prior to delivery of deed, there be loss or damage by fire or other casualty of or to any improvements upon the premises in an amount as adjusted equal to less than 25% of the total amount of insurance then covering such casualty, purchaser shall, upon performing h? part under this contract, be entitled to a credit on account of the purchase price of the amount of money obtained or to be obtained by seller from such insurance for such loss or damage; and in case the amount so adjusted shall equal 25% or more of the total amount of such insurance purchaser may, at h? option, be credited with such insurance money, h? option to be exercised not later than _________ days after the loss or damages shall be adjusted and purchaser notified of the amount; and the time for payment of the price, if purchaser elects to perform the contract, shall be extended for _________ days after the exercise of such option. The amount of any credit of insurance money shall be applied first to reduce pro rata, the deferred payments, if any, secured by purchase money mortgage. If purchaser shall not exercise last mentioned option, this contract shall be automatically terminated. If the loss or damage shall not be adjusted within _________ months from the date of this contract, purchaser at his option may terminate this contract. The loss or damage shall be deemed adjusted within the meaning of this contract when the amount has been agreed on and the insurers are ready, able and willing to pay it. In case there is no insurance sufficient to cover such casualty and the loss or damage shall equal 5%, or more, of the value of the improvements, the purchaser may terminate this contract.