Legal Question in Wills and Trusts in Alabama

division of insurance proceeds

My husband and I own a lake house that his dad and stepmother live in. We pay the homeowners' insurance on the property that includes contents/personal property coverage. The stepmother brought her personal property into the home when she married my husband's father. We need an agreement whereby she agrees to accept a certain sum of money in payment for her personal property in the event the lake house is destroyed; not the entire amount as shown in the policy because we have property in the house also. The stepmother is not entitled to anything except what furnishings/personal property she brought to the house. We own the lake house and all other structures adjoining it as well as the furnishings we placed in the house. We want to make sure if the property is damaged, i.e., fire, she accepts only a certain amount of money in satisfaction of her personal property. Nothing more, nothing less.


Asked on 1/12/06, 4:29 pm

1 Answer from Attorneys
Fred Wood Fred Wood & Associates LLC

Re: division of insurance proceeds

an insurance policy is simply a contract between you and the company. If you are listed as the owner and beneficiary under the policy they would pay all the money to you and you would disburse it. However, the company would probably want to verify they the property is yours. You should contact your agent. You may need a seperate policy for your in-laws property or the agent might be able to do a seperate Rider to the policy listing in detail the property that was theirs. In this way they would then deal with the company over value. You really should talk to your agent at once as their is a good possibility that the company would try not to pay anything for property that did not belong to you. Also remember that they will be offering the Actual Cash Value at the time of the loss not the price you paid. This can be very important and frustrating.

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Answered on 1/13/06, 12:53 am


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