What to know about Force Placed Insurance and How to Avoid It

There are many Tampa Bay area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here to learn about our “Your Home Sold Guaranteed in 29 Days” program or for a free property valuation so you know what your home can sell for in today’s market. You may also call me at (813) 359-8990 for a FREE home buying or selling consultation to answer any of your real estate questions.

Andrew Duncan, Tampa Bay's #1 Realtor and Expert, has Richard Vasquez of Artisan Insurance as guest on The Duncan Duo Real Estate Show to talk about Force Placed Insurance and how to avoid it.

One of the first things to avoid getting force placed insurance is to pay attention to your insurance or pay the bill when they came in. It is also important to have a good working relationship with your agent so they can stay on top of things and make sure they take care of issues like this.

Richard explains that the only thing the force placed insurance covers on your house is your loan. If somebody breaks in and robs you, there's no coverage. If your house catches fire and burns to the ground, they're going to pay off your loan but you have no equity. That's the real danger of the force placed insurance. You're only paying for the bank to be covered. You're not paying for yourself or any of your belongings or any liability. And in addition, the coverage is usually more expensive.

Andrew shares some of the most common scenarios of why force placed insurance is imposed. Sometimes when you move and you don't receive your mail in time, it can cause a notice that they did not receive the insurance policy or endorsement information. Another common scenario is when the loan is sold and they mail the certificate of insurance somewhere else. Sometimes change of insurance companies also cause you to miss that and then you get letters that they will be putting force placed insurance because you don't have it, even though you do. They just don't have the information.

Another example is if you get relocated and you decide to rent your property out, you need to inform your insurance company and alert your agent so they can make the necessary adjustments they need to make. A lot of people have the misconception that the insurance would go up but that is not always the case when it comes to rental properties. It will actually save you more money to alert your insurance company because it will no longer cover all of your belongings inside the house.

There is, however, a law that protects consumers from this - the Real Estate Settlement Procedures Act (RESPA). If there is a paperwork error or some errors in the information, he can go back to have it corrected and it will create liability to the bank.

To get more Tampa Bay Real Estate news and advice from Tampa Bay's #1 Realtor, tune in to The Duncan Duo Real Estate Show on 970 WFLA - Tampa Bay every Sundays at 10 am.

No comments :

Post a Comment

Note: Only a member of this blog may post a comment.