Home owner's insurance and mortgage question

[valarltd]

Help me, Obi-Wan Ka-friendslist
You're my only hope.

We got a letter from the insurance company stating they were canceling our home-owner's insurance (probably because we'd actually USED it).

Will this affect our mortgage?
How do we find another homeowner's policy?
Will any one cover us if our policy is terminated?
Is there a Flybynight Homeowners as there is in auto insurance?

We have these dire mental scenarios where the bank says "No insurance? Pay the other $100k you owe, by midnight yesterday or you go out in the snow, little Nell!" (add mustche twirl)

Comments

[vysila.livejournal.com]

~wince~ Don't have a clue, but I do know if you have a mortgage you must have insurance. It's a requirement of any mortgage holder. I'd just start calling local agents - ones who represent multiple carriers, not just a single company. Since you've been dropped by one, you should probably expect to pay higher premiums, alas. (Insurance is such a scam, and it punishes those who need it the most.)

I do know that insurance companies are tightening up, probably a result of the huge claims they've had to pay out in recent years, like Katrina. Last year my home was inspected by my insurance carrier, to make sure it wasn't insured for more than they think it should be. Jerks. My policy was not dropped, thankfully. Probably because I'd spent a bucketload of money in the past two years fixing the place up.

[cbpotts.livejournal.com]

Did they give a reason in the letter, or is a regional cancellation? Regional's easier to work around than for cause cancellation: you can find other companies, you'll pay through the ass for flyby types, but you need to have something ASAP: worst case scenario involves paying rape-me-hard rates while trying to find a better company, I'm sorry to say.

[lisichance.livejournal.com]

If they drop your insurance, your mortgage company will usually provide it. Usually, it costs about twice as much as normal homeowner's insurance. After a tornado here, my boss's insurance dropped one of the houses that was damaged- even though they repaired it- and we couldn't find a new company in enough time, so the mortgage co. put their own policy in place. It is costing $800 more a year, but at least the house is covered. And as soon as we get a new policy in place, we can cancel that one and they'll refund any unused premium amount to the escrow account.

I'd suggest giving the mortgage company a call.

[mother2012.livejournal.com]

This is correct.

In our case, any other insurance company is charging more than we can afford. Our mortgage bank has their 'force placed' insurance on it, and it is *less* than what we paid for private full coverage, but it is not full coverage! It covers only the bank's interest, not the contents.

We actually went through a fire while on that insurance. They would have paid up to the amount that we owed the bank, and not a penny more. In fact, the damage was less than that amount, so they paid less.

Our possessions are worth something, of course, but we simply can't afford better coverage.

The D-Man checks in

[(Anonymous)]

Very important to note whether your cancellation was for cause or just a regional hit; the latter being far easier a monkey to get off your back when shopping for a new carrier. State Farm has always treated me well (put a whole bloody new roof on my house while putting my wife and I up in a 4-star hotel with our cats for 6 weeks, and then didn't even raise the rates), but check with an agent who represents more than 1 carrier for probably the best deal... if there's any to be had. If it was a regional hit, every carrier could be wary of picking anyone up from that area for anything close to a reasonable rate. Maybe it's time to sell and move to Arizona. I hear they have great state health insurance coverage, and homes are fair-easy to come by there for reasonable/comparable prices.