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Forced Insurance (due to 1yr lapse)

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FELIX75051

Junior Member
What is the name of your state (only U.S. law)? Texas

My Mortgage company told me that my home owner insurance coverage lapsed between 2009 and thru 2010.
My Mortgage company now forced a home owner insurance on me for 1 year at $8500.00
My question is is this fair, when my home owner insurance is not more than $1100 a year. What can I do to fight this and what are my options?.
Can I fight this and if so how?
And if they can force insurance on me for the duration of the lapse, does it have to be that expensive? Is this legal?
Thank you.
 


Zigner

Senior Member, Non-Attorney
What is the name of your state (only U.S. law)? Texas

My Mortgage company told me that my home owner insurance coverage lapsed between 2009 and thru 2010.
My Mortgage company now forced a home owner insurance on me for 1 year at $8500.00
My question is is this fair, when my home owner insurance is not more than $1100 a year. What can I do to fight this and what are my options?.
Can I fight this and if so how?
And if they can force insurance on me for the duration of the lapse, does it have to be that expensive? Is this legal?
Thank you.
Not only is it perfectly legal, but you agreed to it.
 

Handcoc

Member
What is the name of your state (only U.S. law)? Texas
. What can I do to fight this and what are my options?.
Pay off the house & then you'll have no mortgage.

Read your CONTRACT .. it may state that they can force you to get insurance via one they pick if you lapse.

Or bring your loan documents to an attny to review.
 

FlyingRon

Senior Member
Forced insurance is never cheap, the risk is high. Unless you can show that you indeed had insurance coverage, you're stuck paying it.
 

LdiJ

Senior Member
Additionally, the premium goes way up once you let the place go uninsured.
While I agree, I am wondering just how the insurance ended up lapsed? Normally homeowner's insurance is part of escrow, and would be paid by the mortgage company.

I also think that 8500.00 is WAY high. That is about a 750% increase. Due to an error on my mortgage company's part many moons ago my insurance lapsed for about 2 months (I was unaware of it until contacted by my agent, who happened to be my dad). I immediately reinstated it and paid it myself and then raised some holy heck with the mortgage company.
 

nextwife

Senior Member
While I agree, I am wondering just how the insurance ended up lapsed? Normally homeowner's insurance is part of escrow, and would be paid by the mortgage company.

I also think that 8500.00 is WAY high. That is about a 750% increase. Due to an error on my mortgage company's part many moons ago my insurance lapsed for about 2 months (I was unaware of it until contacted by my agent, who happened to be my dad). I immediately reinstated it and paid it myself and then raised some holy heck with the mortgage company.
Many loans, especially portfolio, service retained loans, have opt outs of escrow. I have been a homeowner since '86 and never had a tax or insurance escrow.

I must occassionally put forced place coverage on lapsed properties, and the companies that provide this service DO charge a TON!
 

ecmst12

Senior Member
It's supposed to be a disincentive to letting your policy lapse, as well. And not only does it cost an arm and a let, but it doesn't even protect YOU, only the lender.
 

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