What is force-placed insurance?
Without a doubt, the most important thing a homeowner needs to have is a good insurance policy that can protect them when things go awry. If something happens to your homeowner’s insurance policy, you may have to deal with force-placed insurance. Your home lender may issue force-placed (also referred to as lender-placed or creditor-placed) when your insurance policy has been labeled insufficient or has been canceled and not yet replaced.
If your lender has put force-placed insurance on your property, it is important that you obtain a new policy as soon as possible. You may want to ask your insurance company if they will instate your previous policy again or if you need to obtain a different policy altogether. Once you have obtained new insurance, you should request that your servicer removes the force-placed insurance as soon as they receive the documents about your new policy. One important thing to note is that you should continue to make payments on the force-placed insurance policy until the change is finalized to ensure you don’t hurt your credit due to missed payments. Force-placed insurance is generally more expensive and may not cover as much as a regular policy so it is important to speak with an insurance carrier as soon as possible.
Unfortunately, in many situations, force-placed insurance can easily result in legal action. It is important to retain the services of an experienced insurance law attorney who can represent you and ensure the lender is not taking advantage of you.
The Law Office of Craig A. Blumberg is an experienced New York City insurance law firm. If you require quality assistance after having suffered property loss, please contact our firm to schedule a free initial consultation.