There are many exciting aspects of the insurance business and one of the trendiest topics of discussion for insurance business news regards force placed insurance. What this means to the average lender is that force placed insurance, also known as lender placed insurance is a banking tool used by lending houses or mortgage companies to protect the interest of a home or property when the lender fails to renew the insurance property. This insurance news may be startling to some property owners who think that even if they forgot to pay their insurance that the bank or financial institution will cover them. Insurance business news indicates that this is not true and that force placed insurance protects only the lender’s interest in your property. The homeowner has no coverage on the building or property, the contents or even liability. When banks do not receive a copy of the home insurance renewal policy, trouble can start. Banks may view this as a lack of coverage and may activate forced placed policy which will be added to the lender’s monthly payment. This insurance business news is meant to inform insurance policy holders of their responsibility to make insurance payments on time.
Lender placed coverage can be as much as 10 times more expensive than standard insurance. If property owners who are already behind in making payments, or strapped for money, they are going to have an even harder time paying a lender placed insurance policy.
So how do you protect yourself? Insurance business news indicates that as a home or business owner, you should start by reviewing your current coverage and making sure that it is adequate for the size loan that you have on your property. Doing this yearly can make sure you are getting the coverage you need. If a loan has been sold to another lending house, don’t assume that the home insurance company has been notified of this change. Let your agent know when the loan has been sold so they know who is to be billed.
If there is a premium on the insurance plan, pay it before it is due.
If you have questions about forced placed insurance, do not wait to speak with your agent. An agent who is up on his or her insurance business news will be able to help you work out a payment plan. Your agent should have your best interest in mind and is willing to get you the lowest possible price.