Forced Insurance billed for a prior period that has already ended

[chitown]

What is the name of your state? FL

I am in a similar forced insurance situation but have just discovered the insurance balance I owe includes 11 months of insurance coverage from 2-06 to 1-07. The insurance was added to my monthly mortgage payment (no escrow, no pmi) starting in 4-07. I am an adult and screwed up so even though the forced insurance policy premium for 2007 is 500% higher than a quote I received yesterday. I have paid and will pay the lenders insurance co. the additional amount until I secure coverage personally. However, the additional amount per month is the sum of the 2006 policy + the 2007 policy divided by 12. The 2007 policy increased 172% from the 2006 policy's cost. The additional cost for homeowners insurance for 1 month is just slightly less than the insurance policy premium quote I received for the ENTIRE year!

I know I had never received the policy and related doc., so I called the Lender and requested it. They said well we sent it to you! I said yes, you probably did, but may I be mailed another copy? Lender says I need to contact the Ins. Co. I request the tele # and Lender says I will transfer you. "Ins. Co." answers the phone with, "This is Richard". I ask what Co. I am talking to and Richard says the Co. name of the LENDER! I ask for copy of the insurance policy and Richard says, "Why, do you have a claim?". I respond, No I just need in case I ever need to file a claim (btw 18 years in the house, 0 claims). Richard counters, "Well, I still don't see why you need a copy, just call us!" Firmly, I say please mail me a copy of the policy. He says He will need to request and it might take two weeks.

The Lender is not SubPrime Lenders R Us, but a worldwide financial institution that I won't name. (Hint: they are in the process of being acquired and are based out of England). I had/have never heard of the Ins. Co but a google search seemed to indicate they are a UK subsidiary of the Lender based out of Atlanta, but organized under the laws of the Grand Bahamas.

Questions:

1. How can I be billed for an insurance coverage that was identified in a policy period that ended 1-07. I read through an older policy which stated a claim must be made within 60 days of the occurrence. I expect a similar time limit with the new Ins. Co., but even if they had a very generous 6 month time limit, I would still exceed the generous time limit to file a claim. I can't file a claim for that period, but they can bill me for it? I can almost guarantee if I did file a claim during the non-insured period that it would be denied.....but billing is acceptable for a policy "starting" 14 mos before assessment?

2. There appears to be a lack of independence between the Lender and Insurance Co. from my telecon experience which could allow policy coverage and premium cost manipulation. Is anyone aware of a statute cite they could direct me to read? Or, is the place to start the Insurance Commissioner's office?

3. Are there any price ceilings for homeowners insurance in effect? If a 100% independent Ins Co. derived the ins. premium the Lender would have a valid defense for the high cost. But a Lender which indirectly is also the Ins. Co. just seems inherently wrong to me (I know, that doesn't mean anything, but sometimes produces a good place to start). Any suggestions?

Thanks for any aid and your valuable time required to respond!

What is the name of your state? Florida (again)

 

[JustAPal00]

What is the name of your state? FL

I am in a similar forced insurance situation but have just discovered the insurance balance I owe includes 11 months of insurance coverage from 2-06 to 1-07. The insurance was added to my monthly mortgage payment (no escrow, no pmi) starting in 4-07. I am an adult and screwed up so even though the forced insurance policy premium for 2007 is 500% higher than a quote I received yesterday. I have paid and will pay the lenders insurance co. the additional amount until I secure coverage personally. However, the additional amount per month is the sum of the 2006 policy + the 2007 policy divided by 12. The 2007 policy increased 172% from the 2006 policy's cost. The additional cost for homeowners insurance for 1 month is just slightly less than the insurance policy premium quote I received for the ENTIRE year!

I know I had never received the policy and related doc., so I called the Lender and requested it. They said well we sent it to you! I said yes, you probably did, but may I be mailed another copy? Lender says I need to contact the Ins. Co. I request the tele # and Lender says I will transfer you. "Ins. Co." answers the phone with, "This is Richard". I ask what Co. I am talking to and Richard says the Co. name of the LENDER! I ask for copy of the insurance policy and Richard says, "Why, do you have a claim?". I respond, No I just need in case I ever need to file a claim (btw 18 years in the house, 0 claims). Richard counters, "Well, I still don't see why you need a copy, just call us!" Firmly, I say please mail me a copy of the policy. He says He will need to request and it might take two weeks.

The Lender is not SubPrime Lenders R Us, but a worldwide financial institution that I won't name. (Hint: they are in the process of being acquired and are based out of England). I had/have never heard of the Ins. Co but a google search seemed to indicate they are a UK subsidiary of the Lender based out of Atlanta, but organized under the laws of the Grand Bahamas.

Questions:

1. How can I be billed for an insurance coverage that was identified in a policy period that ended 1-07. I read through an older policy which stated a claim must be made within 60 days of the occurrence. I expect a similar time limit with the new Ins. Co., but even if they had a very generous 6 month time limit, I would still exceed the generous time limit to file a claim. I can't file a claim for that period, but they can bill me for it? I can almost guarantee if I did file a claim during the non-insured period that it would be denied.....but billing is acceptable for a policy "starting" 14 mos before assessment?
2. There appears to be a lack of independence between the Lender and Insurance Co. from my telecon experience which could allow policy coverage and premium cost manipulation. Is anyone aware of a statute cite they could direct me to read? Or, is the place to start the Insurance Commissioner's office?
3. Are there any price ceilings for homeowners insurance in effect? If a 100% independent Ins Co. derived the ins. premium the Lender would have a valid defense for the high cost. But a Lender which indirectly is also the Ins. Co. just seems inherently wrong to me (I know, that doesn't mean anything, but sometimes produces a good place to start). Any suggestions?
Thanks for any aid and your valuable time required to respond!

What is the name of your state? Florida (again)

1) When you financed your home you agreed to cover it with insurance paying the lender if the home were destroyed. You failed to keep up your end of the agreement!
2) They may have their own insurance department that brokers out their insurance. They probably have insurance to cover uninsured losses. Had you had a loss durring that time you would have been uninsured so they bill you to help pay that premium.
3) Suggestions? Keep your home insured!
3)

 

[efflandt]

If you do not provide proof of insurance as agreed upon, they provide "their" own insurance that just covers "their" interests (at a much higher cost to you). I doubt if it protects your interests or belongings or liability, other than protecting the structure. Don't expect it to cover personal items.

If you want to see the insurance policy, protect your own interests, and save money, buy your own policy. I know insurance is expensive in FL, but the alternative is paying more for less (default lender insurance).

 

[moburkes]

They're not required to give you a copy of the policy, and YES it is ridiculously expensive. They aren't going to give you a copy (I don't know why they just didn't tell you this) because the insurance doesn't protect you. It is ONLY for the lender's benefit. Let's say you had a fire during that previous time frame - it will cover the BUILDING ONLY but not your contents. It also wouldn't cover your liability. Only a policy that you got on your own would do that. Their policy only protects them.

Why so expensive? Two reasons. The insurance company ACCEPTED the risk without reviewing the risk. That means that they said yes to insuring your home not knowing the condition or anything about it. Reason 2. Because they covered it RETROACTIVELY without knowing if something happened at that house that would cause a claim to be filed at a later date, but during the backdated time period. I hope that made sense.

But it is never smart to be without insurance, especially in your state where you don't have many options. Hard lesson learned.

 

[chitown]

Thanks for the replies. After the risk of assumption issue was mentioned I have changed my conclusion for prior period assessment of insurance premiums.

However, after points made that only the structure, not contents nor liability for occupants actions is being insured, I still maintain that the risk premium calculation by the affiliated Ins. Co. is inconsistent with the market as a whole and grossly inflated for the benefit of the Lender and to the detriment of the homeowner. What different conclusion can be reached if a quote can be obtained that INSURES the LENDER as a primary lien holder (for the same amt as which the Lender is insured on the policy it retained) and also covers contents, additional structures and liability of Homeowner for 80% less cost?

The point made that I will not/can not obtain a copy of the policy seems contrary to the general principles of sales/purchase transactions. I have been billed and am paying on an installment basis for a service and/or product, but I have no rights or ability to receive documentation of the service or the physical product I purchased? How would I know the basis to initiate a claim without the underlying Insurance policy. If I purchased a policy directly I would receive that information and the same Lender is in the same position (as having it's loan insured against risk of loss) as in the current situation of an indirect insurance policy purchase. Why in an indirect purchase is the rights to receive product purchased different?

Thanks again for comments and many thanks for prior comments.

 

[moburkes]

Yes, it is consistent and inflated. So, hopefully, you'll never require them to obtain insurance for you again.

 

[alnorth]

Thanks for the replies. After the risk of assumption issue was mentioned I have changed my conclusion for prior period assessment of insurance premiums.

However, after points made that only the structure, not contents nor liability for occupants actions is being insured, I still maintain that the risk premium calculation by the affiliated Ins. Co. is inconsistent with the market as a whole and grossly inflated for the benefit of the Lender and to the detriment of the homeowner. What different conclusion can be reached if a quote can be obtained that INSURES the LENDER as a primary lien holder (for the same amt as which the Lender is insured on the policy it retained) and also covers contents, additional structures and liability of Homeowner for 80% less cost?

The point made that I will not/can not obtain a copy of the policy seems contrary to the general principles of sales/purchase transactions. I have been billed and am paying on an installment basis for a service and/or product, but I have no rights or ability to receive documentation of the service or the physical product I purchased? How would I know the basis to initiate a claim without the underlying Insurance policy. If I purchased a policy directly I would receive that information and the same Lender is in the same position (as having it's loan insured against risk of loss) as in the current situation of an indirect insurance policy purchase. Why in an indirect purchase is the rights to receive product purchased different?

Thanks again for comments and many thanks for prior comments.

This insurance policy and premium was approved by your state's department of insurance. If you are trying to compare this special type of policy with a standard homeowner's policy, thats not an accurate comparison. The risk of covering contents and liability coverage pales in comparison to the structure in Florida, and since this policy presumably covers the structure retroactively without the amount of underwriting that a normal insurance policy goes through, it's going to cost more. You would save more by buying your own policy that covers not just the lender, but your own contents and liability. For all you know, you might not have any liability coverage right now, which should scare you as a homeowner. Read all your loan documents, get some quotes, and ask your lender if you can replace their policy with your own policy. I have no idea what you signed, or if you can obtain your own insurance at this point.

The reason they arent giving you the policy is because it probably does not cover you at all, only the lender's interests. The fact that you are paying it doesnt really matter because its not your insurance policy. It would be like demanding to see your neighbor's policy.

When you are getting quotes, you may also want to make sure your covering the same type of perils as your lender's policy. If you are buying a policy that excludes wind (ie, no hurricane coverage), thats going to be a lot less expensive than a policy the lender may have gotten.

 

[mjcrules]

This insurance policy and premium was approved by your state's department of insurance. If you are trying to compare this special type of policy with a standard homeowner's policy, thats not an accurate comparison. The risk of covering contents and liability coverage pales in comparison to the structure in Florida, and since this policy presumably covers the structure retroactively without the amount of underwriting that a normal insurance policy goes through, it's going to cost more. You would save more by buying your own policy that covers not just the lender, but your own contents and liability. For all you know, you might not have any liability coverage right now, which should scare you as a homeowner. Read all your loan documents, get some quotes, and ask your lender if you can replace their policy with your own policy. I have no idea what you signed, or if you can obtain your own insurance at this point.

How would I be able to know if I have liability coverage if I am not provided the insurance policy I purchased?

The reason they aren't giving you the policy is because it probably does not cover you at all, only the lender's interests. The fact that you are paying it doesn't really matter because its not your insurance policy. It would be like demanding to see your neighbor's policy.

If I paid for my neighbor's insurance policy I should have rights to see and demand a copy.

When you are getting quotes, you may also want to make sure your covering the same type of perils as your lender's policy. If you are buying a policy that excludes wind (ie, no hurricane coverage), thats going to be a lot less expensive than a policy the lender may have gotten.

If I can't obtain a copy of the lender's policy I purchased, how would I know the amts, types and deductibles I currently am subject to, but can't verify in writing.

Not wanting to be a smart @ss with my remarks above, but it still seems against all basic rules of a contract. Remitting currency for a product or service should be accompanied by proof of that product or service by physical delivery or documentation as proof of the service performed or in existence.

The lack of underwriting procedures suggested is a very valid point I hadn't considered. The policy I obtained a quote for is not guaranteed until a 4-pt inspection of the home is contracted for and paid by me. If this inspection passes then an additional detailed inspection of the home and premises is contracted for and paid by the Ins. Co.. All told the processing, inspection and approval procedures can take up to 6 weeks. The joy of living in Hurricane Alley!

Thanks to all for postings.

 

[moburkes]

No, it is not against basic rules. If you pay your child's auto insurance or health insurance or car payment, etc, but federal law the insurance company or loan company is not allowed to provide you with that personal information without permission from the person on the policy or the loan. Federal law dictates the privacy policy of financial institutions, not you or I.

 

[chitown]

btw, the Lender did send the homeowner's ins. policy they purchased for me. To be candid, it mirrors the policy I had purchased privately before allowing it to lapse. Same deductibles, same replacement cost for contents, same dollar coverage as prior which was nice to learn. If it wasn't for the 400% increase in the premium (I KNOW, it is/was my fault and am paying the price as a result), I would be one Happy Camper.

 

[raygun]

chitown
i am in the SAME darn situation!
we were insured with allstate. when they cancelled us, we were in the process of reroofing (due to the 2004 hurricanes. they dragged their feet and we paid the price. they did come through, but now every room in our home has damage). since we live in an 85 year old house that didn't have a completed roof, we were unable to get insurance, so wamu graciously force placed us with insurance (500% higher, i might add!). unfortunately, our roof didn't pass inspection and we can't get in touch with our roofer. we were having trouble making our mortgage payment before, we are definitely going to have trouble now that we are paying $800 more per month!
good luck! i hope all works out for you! (and me too!!!)
suzanne

ps. i still haven't told my husband

 

[moburkes]

chitown
i am in the SAME darn situation!
we were insured with allstate. when they cancelled us, we were in the process of reroofing (due to the 2004 hurricanes. they dragged their feet and we paid the price. they did come through, but now every room in our home has damage). since we live in an 85 year old house that didn't have a completed roof, we were unable to get insurance, so wamu graciously force placed us with insurance (500% higher, i might add!). unfortunately, our roof didn't pass inspection and we can't get in touch with our roofer. we were having trouble making our mortgage payment before, we are definitely going to have trouble now that we are paying $800 more per month!
good luck! i hope all works out for you! (and me too!!!)
suzanne

ps. i still haven't told my husband

This post is over 6 months old. Unless you're adding NEW LEGAL advice, please don't post on old threads.