When investing in Digital Assignment Contracts (DACs) on Solslot, it’s crucial to understand the role of insurance and how settlement events affect your investment.
1. Insurance Coverage
Each property listed on Solslot is required to have comprehensive insurance that covers risks such as property damage and liability. This policy protects the property's value, which in turn secures the investment of DAC owners. Importantly, the insurance only pays out in the event of a covered claim, such as damage due to fire or other incidents—not when the property is sold. The DAC owners, as part of Solomons Lot (which includes both Sols Lot Inc. and DAC owners), are named as additional insureds under this policy.
2. Understanding Settlement Events
A Settlement Event is a significant occurrence that triggers the distribution of proceeds related to the property. These events include:
Sale of the Property: When the property is sold, the proceeds are distributed among DAC owners based on their fractional interests.
Owner Buyout: The original homeowner may buy back the DACs, leading to a settlement.
Insurance Claim: If the property suffers damage and an insurance claim is made, the proceeds are used to repair the property. This ensures that the property remains in good condition, thereby preserving its value and the value of the DACs.
3. Role of Protective Advances
To keep the property in good condition and ensure it remains insured, Sols Lot Inc. may make Protective Advances. These are funds advanced to cover necessary expenses like repairs or insurance premiums. These advances are reimbursed to Sols Lot Inc. or the assigns who made them at an 8% annual interest rate. While DAC owners share the responsibility proportionally, the original homeowner is ultimately charged for these costs.
Why This Matters
Insurance plays a vital role in maintaining the property's value, ensuring that your investment is protected against unforeseen risks. Settlement events define when and how DAC owners receive returns on their investments. Understanding these processes allows you to invest in DACs on Solslot with confidence, knowing that your interests are safeguarded through well-structured insurance and financial mechanisms.