Is it legal?

[mevans]

What is the name of your state? NC

I received a letter from my mortgage lender saying my deductible on my homeowner's insurance exceeds the maximum they allow? Is is legal for a mortgage lender to dictate what my deductible can be? Why am I not allowed to choose my own deductible? I chose a higher deductible because I can afford it and it saves me hundreds on premiums every year.

[Happy Trails]

Originally Posted by mevans

What is the name of your state? NC

I received a letter from my mortgage lender saying my deductible on my homeowner's insurance exceeds the maximum they allow? Is is legal for a mortgage lender to dictate what my deductible can be? Why am I not allowed to choose my own deductible? I chose a higher deductible because I can afford it and it saves me hundreds on premiums every year.

Since they are the lenders, you have to go by their terms. They are trying to protect their investment.

[mevans]

What I really want to know - is there law to support the lender being able to dictate the amount of the deductible? I know from past experience that lenders try and likely get away with requiring more coverage than is necessary to replace the home. For example, if your dwelling is worth $100,000 and the value of land and dwelling is $180,000 and your mortgage is $144,000, some lenders say you have to have $144,000 coverage. That is not legal. The most that they can require you to have is replacement cost of the dwelling.

So, my thinking is that this lender may be attempting to require a deductible of their choosing illegally. Does anyone have information regarding law on this subject?

[Some Random Guy]

Stop hoping for a law. This is a contract matter. Somebody lent you money that you contracturally agreed to repay and in the meantime you have to abide by their rules as outlined in the written agreements with them.

Ask them to show you the document or part of your contract that specifies how much insurance to carry.

Also, get a quote from your insurance agent and see what the expanded coverage would cost. The fight may not be worth the expense.

[mevans]

Originally Posted by Some Random Guy

Stop hoping for a law. This is a contract matter. Somebody lent you money that you contracturally agreed to repay and in the meantime you have to abide by their rules as outlined in the written agreements with them.

Ask them to show you the document or part of your contract that specifies how much insurance to carry.

Also, get a quote from your insurance agent and see what the expanded coverage would cost. The fight may not be worth the expense.

Coverage is not the issue. The deductible amount is. You make a good point. I'll check my written agreement with them and see if it states that my deductible shall be 1% or $1,000 whichever is more.
Thank you.