What must a purchaser do to take assignment of a seller's insurance policy?

To take assignment of a seller's insurance policy, the purchaser must obtain the insurance company's approval. This is because insurance policies often contain clauses regarding assignment that may require the insurer's consent before a policy can be transferred to another party. Insurance companies typically want to assess the risk associated with the new insured party and ensure that the terms of the policy still apply under the new ownership.

Obtaining this approval is crucial for a smooth transition of coverage and to ensure that there are no lapses in protection. Without consent, the assignment may not be legally effective, leaving the purchaser without the intended coverage. This requirement is common practice in the insurance industry and helps protect both the insurer and the insured in the event of a claim.

In contrast, terminating the existing policy generally is not necessary or desirable, as this would leave the seller without coverage. Paying the seller directly for the policy does not address the need for the insurer's approval. Waiting until after closing does not align with the proper procedure, as the necessary consent should ideally be secured beforehand to ensure seamless coverage for the purchaser immediately upon taking ownership.