Homeowner's Insurance problem
annie
Insurance problem
In October 2005, my wife and I made an offer on a house. The owner of the
house has insurance company X already as her homeowner's insurance. In
November, the insurance company sent an agent out to inspect the
property. There was still snow on the ground, so the guy drove up,
looked, but he never got out of his car.
He goes back to insurance company x and the company continues to insure
the house.
We end up not buying for a bunch of reasons, mainly because the seller
never comes down in price at all.
The house sits on the market, and in May 2006, the price of the house has
come down. We make an offer and are set to close in June. Insurance
company x is notified of this but they do not send an agent out to do an
inspection until July, one month after we closed.
This time, the agent actually gets out of his car and walks up to the
house. Now, he finds several things wrong with it that would make it
uninsurable.
Now that the snow is gone from the roof, the inspector decides that the
roof wont last another season. Now that he actually walks up to the
house, he decides that the paint, which is peeling (and which of course
he says is lead) must be scraped and repainted as soon as possible. (In
CT, by state law, insurers are liable for lead paint.)
He goes back and tells his boss, and his boss calls my wife and says "you
have 90 days to get me signed contracts from contractors to replace the
roof and repaint the house." He took an angry tone as if it were our
fault.
We knew that the roof needed work, so we planned on that anyway, but we
cannot afford to do a paint job right this minute, which estimates are
coming in for at $12,000.
When the wife asks where all of these things suddenly came from, the
insurance guy admits that the guy who did the inspection never even got
out of the car the first time. The wife tells him that if the inspector
had done his job and found these things back in October 2005, we would
not have bought the house (true, we wouldn't have). He generally acts
rude and admits to no wrongdoing.
In early August, I call to tell the insurance guy that we have a roofer
but not a painter, and by the way, why havent we seen any letter about
this 90 day thing?
Now, the insurance company rep is suddenly very nice with me on the
phone. It's out of his hands he says, he passed it on to the higher-ups,
he claims. "Dont give me the roofing contract until you have both that
and the painting contract," he says. He tells me that "they" might issue
the letter by the end of the month, but _when_ "they" do, thats when the
90 days begins, and "they might tell you October first." (? 90 days but
by my count October 1 is less). He's very vague with me. If my insurance
is discontinued, the mortgage is discontinued.
1. Would it get me anywhere to bring this to a lawyer, or would I be
wasting my time?
2. If I go to another insurance company, won't they just tell me the same
thing?
3. Is it possible that the insurance agent is simply lying? He knows he
messed up and is hoping we fix everything so his messup never comes to
light?
Thanks for any thoughts
Barry Gold
>Insurance problem
>
>In October 2005, my wife and I made an offer on a house. The owner of the
>house has insurance company X already as her homeowner's insurance. In
>November, the insurance company sent an agent out to inspect the
>property. There was still snow on the ground, so the guy drove up,
>looked, but he never got out of his car.
the house and found two major problems -- roof needs replacement
and peeling lead paint. Insurer won't write insurance unless
these are corrected within 90 days.
OP wants to know what he can do about this.]
First of all, the insurance agent isn't responsible to *you* for the
state of the property, he is responsible to his employer, the
insurance company.
Second, if you took out a loan to buy the house, (a "mortgage" but
probably a Deed of Trust), you need to have basic insurance or you
will be in default on your loan -- and your lender will take out
"Lender's Single Interest" (LSI) insurance, which covers his loss if
the house burns down but won't pay for _your_ loss. You will get
charged for this LSI insurance, and it usually costs more for a given
coverage than normal homeowner's insurance.
You have several options, none of them very good:
1. Get the work done within the 90 day deadline.
2. Get a lawyer and see if you have a "cause of action" (something you
can sue over) against the seller, for failure to disclose the
problems.
3. Check with several insurance agents. It may be possible to buy
pure fire insurance (as opposed to the "Homeowner's" package). I
think fire insurance will satisfy the requirements of your loan, but
check your loan papers to make sure -- and then consult a lawyer.
4. If "insurance company X" has already written a policy on the house
and/or accepted a "binder" (payment of premium in advance of policy
issuance), you may have a valid policy regardless of what the agent
and/or his boss say. Again, this is an area where you should consult
a lawyer. But your policy will only be good until the next renewal
date, probably 6 months or 1 year from the date you closed on the
house, so you will *still* need to get that work done, you just get a
little more time to do it in.
You have learned an important (and expensive) lesson: whenever you buy
real property, you should have an inspector (*not* an insurance agent)
check it out. The inspector will tell you what is wrong with the
property, and sometimes recommend that you have a specialist come out
and check something, e.g., the roof and peeling paint. If you had
done this, you would have found out about the problems before you made
an offer on the house. And if the inspector failed to find problems
because he didn't do his job, you would be able to sue the inspector
and probably collect from him or his "errors and omissions" insurance.
You have
>1. Would it get me anywhere to bring this to a lawyer, or would I be
>wasting my time?
It sounds complicated, and anything complicated should be run by a
lawyer.
>2. If I go to another insurance company, won't they just tell me the same
>thing?
Very likely.
>3. Is it possible that the insurance agent is simply lying? He knows he
>messed up and is hoping we fix everything so his messup never comes to
>light?
Maybe, but I wouldn't count on it without seeing a lawyer. The most
important thing you can do is *see a lawyer*.
Your best bet is to ask your personal attorney -- the one who handles
routine matters like wills -- to recommend a specialist in
real estate and home insurance. If you don't have a personal attorney,
ask your friends, relatives, and co-workers to ask their attorney for
such a recommendation. If several come back with the same name, call
that one first.
If all else fails, ask your county Bar Association for their referral
list, or look in the yellow pages. But a referral from somebody you
trust is better than relying on a YP ad, and the Bar Association just
lists every lawyer who _says_ he/she works in that speciality.
Call up and ask for an appointment. Ask how much he will charge
for the initial consulation.
--
I pledge allegiance to the Constitution of the United States of America, and
to the republic which it established, one nation from many peoples, promising
liberty and justice for all.
Feel free to use the above variant pledge in your own postings.
Jobeth66
representative, and wants to know their recourse against the
agent/representative>
> 1. Would it get me anywhere to bring this to a lawyer, or would I be
> wasting my time?
>
> 2. If I go to another insurance company, won't they just tell me the same
> thing?
>
> 3. Is it possible that the insurance agent is simply lying? He knows he
> messed up and is hoping we fix everything so his messup never comes to
> light?
>
> Thanks for any thoughts
I'm confused as to what duty you think the inspector for the
homeowner's insurance carrier owes you? He is not a home inspector
hired by *you* to provide a status on the condition and habitability of
the home, he's an inspector hired by the insurance carrier to provide
them with information on the insurability and risk to them of insuring
your home.
It would be wasting your time to bring this to an attorney except in as
much as you have a right to sue the prior owner for non-disclosure, if
such is the case and disclosure is required.
Another insurance company is likely to tell you the same exact thing,
and your recourse is the same.
I don't see where the agent 'messed up' except that the inspection
wasn't completed properly or timely. The carrier provided coverage
after the 'mess up', and at such time as they did complete their
inspection, they determined that as a condition of retaining coverage
through them, some deficiencies and potential hazards must be resolved,
or they will no longer offer you insurance. A carrier can change their
underwriting guidelines and request compliance in order to continue
coverage, it's their perogative.
You can always contact your mortgage holder to find out if they provide
insurance, but you're likely to pay more through them, and they may
only cover your property up to the value of their lien.
Insurance is not a right, it is a contract.
Ruth
"annie" <po...@it.here> wrote in message
news:1e06e25pgauhhq0es...@4ax.com...
>
> Insurance problem
If my insurance is discontinued, the mortgage is discontinued.
This is not the case. If your insurance is discontinued, your mortgage
will not be affected. However, your lender may secure "force-placed"
coverage to protect their interests and add the cost, usually substantially
higher, to your monthly payment.
>
> 1. Would it get me anywhere to bring this to a lawyer, or would I be
> wasting my time?
I don't think a lawyer will be able to get much done with this. You had
no contract with the insurance company at the time of the original offer.
It is common practice for an insurance company to completely re-underwrite
an application for insurance even if it is on a property they had perviously
insured for another party.
>
> 2. If I go to another insurance company, won't they just tell me the same
> thing?
It is possible, but there's no way to predict what another insepction
might uncover. And it might buy you another 60-90 days to get the painting
done.
>
> 3. Is it possible that the insurance agent is simply lying? He knows he
> messed up and is hoping we fix everything so his messup never comes to
> light?
That's possible too, but doesn't have much bearing.
Generally, and this depends on your state insurance laws, an insurance
company can cancel after 60 days for material misrepresention or for an
increase in risk that would have caused them to decline the policy had they
know at the time of application. I don't think either of these occurred.
You can try to contact the consumer hotline at your state's insurance
department. Generally, the consumer gets the benefit of the doubt.
--
Ruth, Greta, Woody & Thelma