I would like to start off the article with an introduction my name is Mohammed Abid owner and principal agent of Diverse Insurance Group here in South Florida. Diverse Insurance Group is deeply rooted here in Florida; being a born and raised Floridian myself I understand the logistics of the Florida property market. When we formed Diverse Insurance Group we had every intent to make sure we pass on the knowledge we obtained through our insurance careers to the public and all Floridians.
Now to touch on the topic at hand, lender-placed (or force-placed) insurance is coverage that the bank or a mortgage lender will purchase on the behalf of the homeowner if the insured/homeowner fails to provide proof of adequate coverage. This purchasing process of lender-placed (or force-placed) insurance is done by bank or a mortgage lender to protect the bank or a mortgage lenders interests, and their interests only. This often occurs in situations such as foreclosure, loan modifications’ and/ or abandonment. The issue becomes the affordability factor and the coverage provided by these lender-placed or force-placed polices, and usually written in the surplus insurance market. The NON-admitted or surplus insurance market does not abide by the regulations set forth by the Florida Department of Insurance, therefore not leaving anywhere to go if the insured/homeowner has any issues i.e. claims handling, billing etc.
Unfortunately we see this more frequently than we would like to see a homeowner comes to us carrying lender-placed (or force-placed) insurance and they are paying approximately 40% higher rates than they would pay in the traditional insurance market. The issue is education people are not notified in a timely manner and they end up carrying these polices for years assuming the bank is paying for my insurance and I have no need to shop it, WRONG!. The bank is just covering the portion of the property that they ultimately care about the shell or structure. Most all lender-placed (or force-placed) do NOT provide coverage for your personal property nor do they provide any coverage for liability against others. So basically if your home was to burn down, GOD forbid, the bank would get paid however you would be out of luck. As for not having liability if someone was to slip/fall or injure themselves on your premises and decided to sue you it would come out of your pocket.
We have been trying to figure out different ways to educate the client that’s when we met United Financial Counselors they took education to another level, the belief they have is the same we have which is in educating the client. They have allowed us to help their clients in securing private market insurance which often times results in allowing the insured/homeowner to keep their homes. I can honestly say I have never met a group of individuals so dedicated to their craft. They always keep the clients best interest at heart and are always looking to help them in their times of financial difficulty.
I can go on and on about lender-placed (or force-placed) insurance however it would more than likely bore most of you, I did want to reiterate a few key notes from above.
– Lender-placed (or force-placed) insurance rates are approximately 40% higher rates than private market.
– Lender-placed (or force-placed) insurance are purchased by mortgage lenders to protect the bank or a mortgage lenders interests, and their interests only.
– Most all lender-placed (or force-placed) do NOT provide coverage for your personal property nor do they provide any coverage for liability against others.
Please take a moment to review your current status and let us know by calling 754-300-7352 or visit us at www.insurefloridians.com if we can help in any way we will be more than happy to do so, remember we always offer a FREE review of your current polices.