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  1. #1
    katsmile is offline Junior Member
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    Insurance cancelled-Banks fault?

    Georgia

    We were doing some remodel work on our house last winter, with a small child, we dicided to move into my parents home while we worked on the house. Too many things a toddler could get into. The house payments are all up to date, never been behind. We were set to move back in last week, only to find the house had been broken into (literally broken windows every where) they took the appliances, HVAC, tore wires out of the walls, destroying the sheet rock, ect. Horrible mess. Police came and made a report, and we contacted our ins co, state farm. We were informed that our bank (wells fargo)had NOT made the required payments to statefarm, and had been notified in febuary that the policy would cancel in march. We were never aware that WF didn't pay the insurance.

    WF now says that they were not required to tell us about the insurance cancelation until it actually cancelled. Which was a few days before the break in. WF says it is OUR responsibilty to take care of the damage. How can this be right? Our mortgage includes the homeowners insurance.

    What do we do Now? Do we have any recourse? Thanks
  2. #2
    justalayman is offline Senior Member
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    why did they not pay the insurance?


    WF now says that they were not required to tell us about the insurance cancelation until it actually cancelled. Which was a few days before the break in.
    so, did they ever tell you, prior to the break in, that the insurance had lapsed?
  3. #3
    katsmile is offline Junior Member
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    No, the first we knew about the cancelled insurance was when we called state farm. SF told us they had notified the bank in mid febuary. WF says they don't have to notify us UNTIL the policy cancels which was two days before the break in. WF never notified us. When we asked them why, they said they would have sent us a letter that week and told us we had 60 days to get a new policy. How is that possible that they receive the payments and when they don't make them we are left with no coverage.

    Appreciate any answers.
  4. #4
    FlyingRon is offline Senior Member
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    The other bad news is that your homeowner's insurance may not have covered a vacant house even if it had been paid up. The risk assumes that you are living there.

    Why did WF stop making the insurance payments?

    Normally, you get notified by the insurer when the payments are late. Did you just blow off these notices assuming the lender was taking care of it?
  5. #5
    Banned_Princess is offline Senior Member
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    Ask State Farm WHY didn't they notify you they were canceling for non payment? I bet they did. you just didnt look. at the mail you got from them.

    who lived in the home while renovating, and did you notify SF that you were renovating the place?
  6. #6
    katsmile is offline Junior Member
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    We have looked high and low for any kind of notice from either state farm or wells fargo (which by the way, it has been almost two weeks since the break in and still nothing from WF).., SF did send a cancelation notice, but it only came after the break in. So far, WF has not given us a reason for them not paying the insurance, everytime we call we get re-routed to 10 different people. I tried to go into my local WF to get some answers and they tell me all of this has to handled with customer relations at the 1-800 number.

    Ron**************.I understand about the "vacant" part now, we didn't think we'd be out of house more then two or 3 weeks initally, but as always with this kind of work, it takes longer. I wouldn't think 6 weeks would be a problem, but it probably is.

    Just like to know if we have recourse with the bank. They took the payments, just never forwarded them to SF. Seems to me we should at least be due a refund. Anyway, all help is much appreciated.
  7. #7
    justalayman is offline Senior Member
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    Quote Originally Posted by katsmile View Post

    Just like to know if we have recourse with the bank. They took the payments, just never forwarded them to SF. Seems to me we should at least be due a refund. Anyway, all help is much appreciated.
    that would be a definite maybe. Sorry but not enough info to make the call. Find out why the payments weren't made. Find out if they are contractually obligated to pay for the insurance on your behalf.
  8. #8
    katsmile is offline Junior Member
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    Quote Originally Posted by justalayman View Post
    that would be a definite maybe. Sorry but not enough info to make the call. Find out why the payments weren't made. Find out if they are contractually obligated to pay for the insurance on your behalf.

    By contractually, this would mean I may find it in my mortgage papers? I will look, or maybe have an attorney look at them. We have had our mortgage with them for 5 years, although it was wachovia orginally and never had any kind of problem like this. Seems to be if things were fine for over 5 years, it shouldn't have been a problem now.

    I think since they hold the mortgage, they would want to insure their collateral was protected! I'll do some checking, thank you.
  9. #9
    Banned_Princess is offline Senior Member
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    Quote Originally Posted by katsmile View Post
    By contractually, this would mean I may find it in my mortgage papers? I will look, or maybe have an attorney look at them. We have had our mortgage with them for 5 years, although it was wachovia orginally and never had any kind of problem like this. Seems to be if things were fine for over 5 years, it shouldn't have been a problem now.

    I think since they hold the mortgage, they would want to insure their collateral was protected! I'll do some checking, thank you.
    While working in an agency... I found that the amount of escrow the mortgage holds for the insurance, is the insurance premium from the year before... sometimes when the insurance premium goes up, the policy comes close to canceling due to the difference. It isn't until we get the insured notified that the problem gets rectified, the bank just sends notices to the insured regarding the contractual obligation to keep insurance on the premises and asks for binders from the new insurance, and sets up to pay that insurance the same amount next year, and depending on how much was overpaid (prorated amount )you would receive a refund check from the old policy.

    maybe something like that happened to you.
    When looking for new insurance, I suggest you work with a local agency, to keep anything like this from happening again.
  10. #10
    justalayman is offline Senior Member
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    Quote Originally Posted by katsmile View Post
    By contractually, this would mean I may find it in my mortgage papers? I will look, or maybe have an attorney look at them. We have had our mortgage with them for 5 years, although it was wachovia orginally and never had any kind of problem like this. Seems to be if things were fine for over 5 years, it shouldn't have been a problem now.

    I think since they hold the mortgage, they would want to insure their collateral was protected! I'll do some checking, thank you.
    since I presume this was an escrow account, the requirements of the parties of the escrow agreement should be stated in the escrow agreement/contract.
  11. #11
    You Are Guilty is offline Senior Member
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    If I had to wager a completely random guess (well, ok, maybe this has happened once or a dozen times before), Wells took your money and mistakenly applied it to someone else's account (perhaps with a similar account #). Now, they are in coverup mode. Since it seems like their initial customer service efforts were a bit, ah, lacking so far, you should try escalating it to management (you can usually find contact info for upper management on a variety of websites. Send them all a written letter). But barring some cooperation from the bank's end, this will likely require a lawyer (and possibly a lawsuit) to resolve.

    In the interim, have you since secured insurance from another source?
    Quote Originally Posted by Tranquility
    Once you get to crazy land, it is only a guess on how to get out.
  12. #12
    katsmile is offline Junior Member
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    Quote Originally Posted by You Are Guilty View Post
    If I had to wager a completely random guess (well, ok, maybe this has happened once or a dozen times before), Wells took your money and mistakenly applied it to someone else's account (perhaps with a similar account #). Now, they are in coverup mode. Since it seems like their initial customer service efforts were a bit, ah, lacking so far, you should try escalating it to management (you can usually find contact info for upper management on a variety of websites. Send them all a written letter). But barring some cooperation from the bank's end, this will likely require a lawyer (and possibly a lawsuit) to resolve.

    In the interim, have you since secured insurance from another source?
    I think we will have to hire an attorney, we've been trying to look over the paperwork, but a lot of it is so wrapped up in legalese, I find it difficult to understand. We have since gotten a new policy with statefarm, at nearly double the original premium, since the house will remain vacant until we can make it livable again. We paid the premium for the year up front, so that I don't have to worry. This is so frustrating.

    The only good news is that after cleaning up the mess, the biggest expense will be from the electrician, the rest of the disaster isn't as bad as it looked, the windows, sheet rock, and appliances can be fixed or replaced a lot cheaper the we first thought. At this point though, an attorney will be our next step as I have gotten no where with WF. They promise to call us back all the time after "checking" on something and they never do, then we have to start all over again with another representitve. So far none can answer why the premuims were not paid and some even said it was paid, We did manage to speak with a "supervisor" once and while he apologized profusly for the terrible customer service we have so far received, his only answer was that the bank would be reviewing the situation. I won't hold my breath.

    Thank you all for your help.
  13. #13
    moburkes is offline Senior Member
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    Okay, the insurance contract is between YOU and the insurance company. As a courtesy (and ONLY as a courtesy) they will bill your bank since you've set up the contract as mortgagee bill. By state law, the insurance company has to give you notice when the policy cancels. But, if the policy simply didn't renew, then that can be different than a cancellation.

    But, ultimately, they are responsible for notifying you that your policy is cancelled. The mortgage company isn't obligated to notify you, except as a courtesy. It appears that the notice requirement is 10 days. [url=http://www.oci.ga.gov/ConsumerService/FAQ_Home.aspx]Consumer Services: Frequently Asked Questions - Homeowners Insurance[/url]

    Also, eve if your escrow was GOING TO BE SHORT, they would pay the insurance if you have $ in your escrow account. They would pay the taxes with whatever $ you have leftover, but they would adjust your mortgage payment (usually once a year), to accommodate the increases in premium.

    But I'm confused on why you thought a vacant house full of furniture and belongings wouldn't be a target for theft and didn't at least have an alarm on it?
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  14. #14
    FlyingRon is offline Senior Member
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    The only notice you're EVER likely to get form the mortgage company is that they have noticed you've not had insurance and have purchased and placed forced insurance to cover their interest...here's the bill, remit immediately, thank you.
  15. #15
    katsmile is offline Junior Member
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    Quote Originally Posted by moburkes View Post
    Okay, the insurance contract is between YOU and the insurance company. As a courtesy (and ONLY as a courtesy) they will bill your bank since you've set up the contract as mortgagee bill. By state law, the insurance company has to give you notice when the policy cancels. But, if the policy simply didn't renew, then that can be different than a cancellation.

    But, ultimately, they are responsible for notifying you that your policy is cancelled. The mortgage company isn't obligated to notify you, except as a courtesy. It appears that the notice requirement is 10 days. [url=http://www.oci.ga.gov/ConsumerService/FAQ_Home.aspx]Consumer Services: Frequently Asked Questions - Homeowners Insurance[/url]

    Also, eve if your escrow was GOING TO BE SHORT, they would pay the insurance if you have $ in your escrow account. They would pay the taxes with whatever $ you have leftover, but they would adjust your mortgage payment (usually once a year), to accommodate the increases in premium.

    But I'm confused on why you thought a vacant house full of furniture and belongings wouldn't be a target for theft and didn't at least have an alarm on it?

    Ok now I am really getting confused. State Farm had no problem admiting they did not send us any notice, we have used our local SF office for years. We did get one after the cancellation and it was dated 5 days before the break in, we received it one or two days after. The break in happened either late on a saturday night or the following sunday. My father in law was the one who discovered it monday morning.

    We really didn't consider the house "vacant" since my husband and father in law were there almost daily working in the evenings and on weekends. I admit that we just didn't think it would be a problem. Bad call, I know. As for WF, they say they were NOT required to give any notification of cancellation UNTIL the policy actually cancelled. Over two weeks have gone by and we still have gotten nothing from WF regarding the insurance cancellation. According to SF, the premuims we not paid for Jan, or feb, and notice was sent out to WF Feb 13th that the policy would cancel March 15th. It may be a courtesy for the bank to do this, but if they are NOT going to pay it, then don't collect it.

    We will survive with or without the insurance, it's just an awful feeling seeing the home damaged after our hard work and thinking "well at least we have insurance" only to find out we didn't. Double whammy.

    Thanks for the input.

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