Florida is a great state to live in. The weather is beautiful and there’s always something to do. But Florida is also a high-risk state when it comes to natural disasters. That’s why mortgage lenders will opt for a force-placed insurance policy if the homeowner doesn’t get the appropriate insurance for their property on their own.
Force-placed insurance, also called “credit-placed” or “lender-placed” insurance, is when your mortgage company or auto lender buys an insurance policy on your vehicle or home because you don’t have any coverage, it’s lapsed, or it isn’t enough. If this doesn’t sound too bad, please keep reading…
Florida homeowners should understand what force-placed insurance is and how it may impact them. This type of insurance can be expensive and may not provide the same level of protection as traditional homeowners insurance policies.
At Herman & Wells, our insurance claim attorneys can help you if you are in an insurance dispute or want to challenge a decision your insurance company has made. Call (727) 821-3195 today for a free consultation and we’ll review your claim.
The Cliff Notes: Key Takeaways From This Post
It’s crucial to learn more about force-placed insurance in Florida and how you can avoid being placed in this situation; however, here are the key bullet points if you are in a rush:
- Force-placed insurance is a form of coverage acquired against the home by a bank that holds the mortgage (mortgagee).
- It is generally more expensive and less comprehensive than regular homeowner’s policy, typically covering only the remaining amount due on a property loan.
- Homeowners insurance provides more comprehensive coverage than force-placed insurance and is often cheaper.
- Force-placed insurance can be expensive and may not cover items like damage caused by wear and tear, mold or rot, water damage, etc.
- Lenders are required to provide borrowers 45 days’ notice before purchasing force-placed insurance.
- Homeowners may be able to get their lender to cancel the policy if they can prove they have adequate coverage or get a refund of the premium if it was unnecessary.
- If unable to resolve, an experienced Florida insurance claim lawyer could help.
What Is Force-Placed Insurance?
It’s also known as lender-placed insurance or creditor-placed insurance, and it’s a form of coverage acquired against your home by the bank that holds your mortgage (sometimes dubbed the mortgagee). If your policy has expired or if the bank believes it is insufficient to safeguard its interest in your house, your bank may be compelled to force-place homeowner’s insurance on it. Standard mortgages entitle the lender to purchase insurance for the property owner under specific conditions. While this may appear as a safeguard for both you and the bank, there are some disadvantages associated with it.
It’s unfortunate that force-placed insurance generally costs more than regular homeowner’s insurance. The mortgage allows the bank to require evidence of insurance if they think your coverage has been canceled, is insufficient, or has lapsed, meaning you would have to pay more. In many circumstances, force-placed insurance may be much less comprehensive than a standard homeowner’s policy at a higher price. A force-placed policy, for example, might only cover the amount owed to the lender rather than the complete value of your home.
Who In Florida Would Need This Type of Insurance?
Force-placed insurance is not recommended for anyone. This type of insurance can be expensive and may not provide the same level of protection as traditional homeowners insurance policies. Florida homeowners should understand what force-placed insurance is and how it may impact you. This type of insurance can be expensive and may not provide the same level of protection as traditional homeowners insurance policies. Contact Herman & Wells today for a free consultation and we’ll review your claim.
How Does Force-Placed Insurance Compare To Homeowners Insurance?
It’s important for for Florida residents to be aware of the differences between force-placed insurance and traditional homeowners insurance. Homeowners insurance is a policy that people buy to protect their homes from damage. If something happens to your home, this policy can help you pay for the repairs.
Force-placed insurance, on the other hand, is a policy that is placed on a home by the lender when the homeowner does not have an active homeowners policy. This type of insurance is meant to protect the mortgage lender in the event that the homeowner does not maintain insurance on the property. As mentioned earlier, lender-placed insurance is usually more expensive than a standard homeowners policy and provides very basic protection. It only covers the remaining amount due on a given property loan.
Why It’s A Bad Substitute For Florida Homeowners Insurance
There are several reasons why force-placed insurance is not a good substitute for Florida homeowners insurance. One of the biggest reasons is that it’s much more expensive than regular homeowners insurance. In addition, force-placed insurance policies often provide less coverage than traditional homeowners policies. For example, a lender-placed policy might only cover the amount owed to the lender rather than the complete value of your home.
It’s also important to know that you, as the homeowner, are responsible for paying the premiums on a force-placed insurance policy. If you don’t pay the premium, your lender can add the unpaid amount to your mortgage balance – which will increase the amount you owe on your home.
What Force-Placed Insurance Doesn’t Cover in Florida
As stated earlier, a lender-placed policy often comes with high premiums and limited coverage – which is why it’s important to understand what this type of policy doesn’t cover before letting your regular homeowners insurance policy lapse. Some of the most common exclusions in force-placed insurance policies include:
- Damage caused by normal wear and tear
- Mold, mildew, or rot
- Water damage (unless caused by a covered peril, such as a hurricane)
- Sewer backup or overflows
- Earthquake damage
- Nuclear hazards
- Intentional damage
If you have a force-placed insurance policy and need to file a claim, it’s important to work with an experienced insurance claim lawyer who can help you navigate the claims process and ensure that you get the full benefit of your coverage.
Florida homeowners have enough to worry about – protecting their homes from hurricanes, managing their finances, and dealing with the day-to-day maintenance that comes with owning property. The last thing they need is to worry about whether their lender-placed policy will actually cover them in the event of a loss.
If you have questions about your force-placed insurance policy or need help filing a claim, contact an experienced insurance claim lawyer in Florida today.
Consumer Protection Laws You Don’t Have Access To With Force-Placed Insurance
While force-placed insurance can be beneficial, it can also be expensive and difficult to cancel. And you may not have the same consumer protection rights with a lender-placed policy as you do with a policy you purchase on your own. If you have force-placed insurance, it’s important to understand your rights and how to cancel the policy if you no longer need it.
Florida law requires mortgage lenders to give borrowers at least 45 days’ notice before purchasing force-placed insurance. The notice must state the amount of coverage the lender is requiring and the premium amount. You have the right to purchase your own insurance policy that meets your lender’s requirements. If you do so, you can provide proof of insurance to your lender and they will cancel the lender-placed policy.
Why You’re Paying More & Getting Less With This Type Of Insurance
Florida homeowners are paying hundreds, sometimes even thousands of dollars more each year for insurance they don’t need. And when disaster strikes, they’re often left without the coverage they need to repair or rebuild their home.
If you have force-placed insurance, there’s a good chance you’re overpaying for coverage and you could be at risk of being underinsured. So, what can you do about it? The first thing you should do is shop around for a new policy. There’s a good chance you can find a policy that better meets your needs and that costs less than force-placed insurance.
But if you’ve already shopped around and you’re still stuck with force-placed insurance, there are other options. You may be able to get your lender to cancel the policy if you can prove that you have adequate coverage. Or, you may be able to get a refund of the premium if you can show that your force-placed insurance was unnecessary.
If you’re struggling to get your force-placed insurance policy canceled or refunded, an experienced Florida insurance claim lawyer can help. They can review your policy and help you determine if you have a case against your lender. And if you do, they can fight to get you the relief you deserve. If you have questions about your policy or whether you have a case against your lender, contact an experienced Florida insurance claim lawyer today.
Are You At Risk Of Being Forced Into A Force-Placed Insurance Policy?
If you’re a Florida homeowner, you may be at risk of being forced into a force-placed insurance policy. If your lender thinks you’re not carrying enough insurance, they may force you to buy a lender-placed policy. If you find yourself in this situation, you may want to consider contacting an experienced insurance dispute attorney. Our lawyers can help you understand your rights and options, and they can represent you in negotiations with your lender. Remember that there are steps Florida homeowners can take to avoid this situation.
Insurance Claim Issues? Book A Free Consultation With An Experienced Attorney
If you’re a Florida homeowner and you’re not sure what your rights are when it comes to force-placed insurance, be sure to contact an experienced insurance claim lawyer. They can help you understand your options and represent you in negotiations with your lender.
If you’ve already been hit with a force-placed insurance bill, don’t hesitate to book a free consultation so that we can evaluate your case. We may be able to get the charges reversed and help you get back on track.