Disclaimer: Not a lawyer and comments are meant as personal opinions. No relationship exists with myself as a licensed PA insurance agent. You need to contact your insurance person.
Hi @Donna Ansley,
Your post got me interested as I haven't run across this before as an investor or in my insurance job. I personally think having the "seller" maintain insurance on the property is fine, after all the house is still titled to them during the installment people. You do want to make sure that in the installment agreement there is a clause that details what happens if the house burns down, like getting your installment back.
I don't see any issues if the lender calls to ask about the insurance setup as nothing changes. They are still loaning the money to the "seller", the house is still titled to the "seller" and home insurance is maintained by the "seller". What you have is two people drafting up an agreement saying you pay me this amount of money over a period of time and in return I will give you the house. Until the house is titled over to you, nothing changes from the lender's point of view. I would personally have a lawyer look over the sales installment agreement to make sure you have adequate protection. There is nothing stopping the "seller" actually selling the house via the normal channels before you make that last payment to another party and leave you with nothing to show for after all those payments.
As for your 2nd concerns, you should have a renter's insurance to cover your belongings and for liability as the house is not titled to you yet and until it is you remain a tenant. You might be able get an insurance carrier to sell you a homeowners policy by showing the installment sales agreement, but that is a long shot. Your insurance broker can ask his carriers is any of them is willing to entertain it. Off the top of my head; Foremost, Safeco and maybe Erie might do it.
On a side note, go Comets! I lived in Mountain Top for quite a few years.
