How to Insure a Subto Property

Many Subto Buyers Are Uninsured And Don’t Even Know It!

Many investors in subject-to (subto) deals fall into one of two dangerous traps when it comes to insurance:

1️⃣ They don’t change the seller’s policy because they’re afraid of triggering due on sale—leaving them completely uninsured.
2️⃣ They assume the seller’s insurance still covers them, when in reality, it doesn’t.

🚨 Here’s the harsh truth: If you don’t handle insurance correctly at closing, you could lose everything.

We’ve seen real cases where a buyer took over a property without getting new insurance, and then disaster struck:

🔥 A fire burned the property down.
🚫 The insurance company denied the claim.
💰 The investor lost everything.

But why?!?
✅ The seller was still listed as the insured, but they no longer owned the property (policy is void)!
✅ Even if the seller was still the owner, the policy was for an owner-occupied home while the property was being used as a rental (wrong coverage).

💡 Lesson learned? If you don’t get insurance right at closing, you might not be insured at all.

That’s why we’ve created a step-by-step Subto Insurance Flowchart & Mini-Course for just $29—so you don’t have to figure this out the hard way.

Why You Can’t Leave the Seller’s Insurance in Place

Some investors think they can just keep the seller’s insurance and avoid rocking the boat. That’s a huge mistake.

Here’s why:

1. You’re Not Covered Under the Seller’s Policy

Insurance follows the named insured—not the property. When you take ownership, the seller’s policy no longer applies. If there’s a claim, the insurance company won’t pay you, because you’re not their insured party.

2. The Mortgage Company Gets Notified

When a policy is replaced, the lender is automatically notified. If this process isn’t handled correctly, it can draw attention and put your deal under scrutiny.

⚠️ This is where due-on-sale risk comes in.

To avoid issues, you must:
✔ Minimize direct communication with the lender (avoid phone calls—stick to written channels).
✔ Only cancel the old policy after the new one is accepted by the mortgage company.
✔ Follow a proven process to ensure compliance while keeping risk low.

The Right Way to Insure a Subject-To Property (steps)

To minimize risk of due on sale and ensure appropriate insurance coverage, follow these steps:

Step 1: Secure a New Insurance Policy Before Closing

• Choose an insurer familiar with subto transactions.

• Ensure it meets the mortgage company’s requirements.

• Pay the first premium before or at closing to avoid any gaps in coverage.

Step 2: Get Written Confirmation That the Policy is Bound

• Keep following up until you have written confirmation (email works) that the policy is active.

Step 3: Submit the Policy to the Mortgage Company

• Your insurance provider should actually do this on their own... They'll send the policy to you and the mortgage company.

• The mortgage company will review it for compliance.

Step 4: Monitor for Approval (and Avoid Overcommunication)

• If the mortgage company rejects it, work with your insurer to fix any issues.

• Do NOT call the mortgage company—use email or their web portal.

• Once they start making payments to the new insurance, consider it accepted.

Step 5: Cancel the Old Policy—But Only at the Right Time

• Never cancel the old policy before the new one is fully accepted.

• When canceling, request the refund be issued "Pay to: [Seller’s Name] care of [Your Name]" and attach your power of attorney (POA).

• Use remote/mobile deposit to cash the check without unnecessary scrutiny.

🔗 Read our guide on how to cash checks written to the seller’s name.

🚀 This entire process—and more—is detailed in our Subto Insurance Flowchart & Mini-Course for just $29!

Why This Matters More Than You Think

Many investors assume that just having any insurance is enough. It’s not.

If you have the wrong policy, you could still:
❌ Have claims denied due to incorrect policy type (ex: owner-occupied vs. rental).
❌ Face forced-placed insurance by the lender, which is 3x more expensive.
❌ Attract lender scrutiny, increasing due-on-sale risk unnecessarily.

That’s why our Subto Insurance Flowchart & Mini-Course lays out:
✔ The actual steps to switch insurance the right way.
✔ How to avoid triggering due on sale.
✔ How to ensure your policy actually covers you.

For just $29, you’ll have a step-by-step plan to stay insured and keep your deal safe.

What If Due on Sale Gets Called?

Even when handled properly, there’s always a small risk of due on sale being enforced. If it happens, we can help:

✅ We offer Due on Sale Remediation Services to help you navigate and resolve DOS issues.
✅ We’re partnered with DOS Guard (dosguard.io) when we manage your deals, which offers due-on-sale extended warranty protection for extra peace of mind.

If the lender calls the loan due, don’t panic—we have solutions.

Getting insurance right is the most important thing.

Get It Right—Before It’s Too Late

If you’re buying subto, handling insurance correctly isn’t optional—it’s essential.

🚨 Don’t risk losing your deal or getting caught uninsured.

✔ A step-by-step flowchart mapping out the exact process.
✔ A video walkthrough explaining every detail.
✔ A written guide with real-world examples and best practices.

💡 If you’re doing subto deals, this is the resource you need.

🔹 Get instant access for just $29.
🔹 Protect your deals, your investment, and your peace of mind.

👉 Click Here to Get the Subto Insurance Flowchart & Mini-Course Now

🚀 And if you ever face a due-on-sale issue, we’ve got your back with our Due on Sale Remediation Services and DOS Guard protection.