Under 5.1.6, insurance money payable after damage is to be paid to whom?

• A. The Seller
• B. The Buyer
• C. The Mortgage Lender
• D. The Insurance Company

Answer: (A)

The key idea is who bears the risk and who should receive insurance proceeds before completion. Until completion, the seller remains the owner and bears the loss if the property is damaged. The insurance money, therefore, is payable to the seller to compensate for that loss or to fund repairs, so that the sale can still proceed on the agreed terms. The buyer does not automatically get the payout unless the contract specifically provides for that, and the mortgage lender’s entitlement isn’t triggered by this clause. The insurance company pays to the insured party, which in this context is the seller.