If you have received a letter from us regarding property (fire/homeowners) or flood insurance that may be required on your mortgaged
property, below are answers to some common questions you may have.
Why did I get this letter?
We will send a letter if we do not have a copy of your current property (fire/homeowners) or flood insurance policy, or the policy
information we received was incomplete. Also, you will receive a letter if the policy we have does not show our name and address as
a "Mortgagee". This mortgagee information is required to properly comply with the insurance requirements specified in your mortgage
contract.
What should I do with this letter?
If you have property (fire/homeowners) and/or flood insurance currently in place, take or send this letter to your insurance agent
and ask him/her to add our name and address to your policy as a "Mortgagee", as indicated on the letter, and then forward a revised
copy of the policy to us as requested. Also, your agent may use this letter to submit temporary evidence of insurance to us on-line.
If you submit a insurance information as the borrower, we will use this information to update your agents information for future
correspondence.
Why should I comply with this letter?
Your compliance will help us obtain the insurance information required and will stop further action. Also, after your agent updates
the information the insurance company will have the proper information on file to automatically notify us of current insurance in
effect. This is the most effective way to have the insurance company directly communicate with us. Further, if your loan is escrowed
for insurance, incorrect mortgagee information on the policy may cause delays paying your insurance premium from your escrowed account.
I don’t have fire or homeowners insurance, what should I do?
Contact a local insurance agent. Many insurance agents can be found in your Yellow Pages directory. An agent will help you purchase
required fire or homeowners insurance. Show them this letter and ask that our name and address be listed as a "Mortgagee" on your
policy.
What Policies do I need to cover my property and meet my coverage needs?
-
Property (Fire/Homeowners) Insurance: This insurance coverage is required by all mortgage companies. This coverage provides for
repair or replacement of damaged property should a loss occur.
-
Flood Insurance: This insurance coverage is required by federal law if your property is located in a Special Flood Hazard Area
(SFHA). We will inform you if flood insurance is required for your property.
-
Other Coverages: We may require other types of insurance coverage. Required insurance type(s) for your mortgage will be shown
on the letter you received.
What is acceptable insurance?
Your policy should meet these minimum requirements:
- Our name and address must be correctly listed as a "Mortgagee" on all policies.
-
Your insurance company must be rated with a minimum acceptable rating by an accredited insurance rating agency. We require that
your company be rated as required by your loan documents.
-
Your property (fire/homeowners) insurance coverage amount must at a minimum equal full replacement value or the loan balance
on your property .
-
The deductible amount specified on you insurance policy cannot exceed the maximum acceptable deductable as required by your
loan documents.
If my agent submits my insurance on an ACORD form, what should be included for it to be acceptable proof of insurance?
Documentation for property (fire/homeowners) insurance may be initially submitted on an ACORD 27 or ACORD28 form as appropriate.
A Policy Declarations should be sent to us as soon as it is available. Required information that must be included is listed below:
- Insured name and mailing address
- Policy number (or binder number if applicable)
- Insured location address
- Effective and expiration dates
- Clearly defined coverage information-lines of coverage, insurance limits and deductibles
- We are listed as mortgagee or additional interest on the policy
- Full Insurance Carrier Name
- Agent Name, Address, fax/phone number
Do I have to tell my mortgage company if I switch insurance companies?
Yes, you should always keep us informed of your current insurance status and insurance company. The best way to accomplish this is
through your insurance agent by providing our name and address on the new policy as a "Mortgagee". Keeping this information current
will help us avoid unnecessary letters and unrequired issuance of lender-placed insurance on your property.
I cannot get insurance. What should I do?
Check with your insurance agent. If they cannot help you obtain an insurance policy ask them to refer you to the FAIR (Fair Access
to Insurance Requirements) plan or the Joint Underwriting Association in your state. The FAIR plan program can often provide
coverage for properties that may not be eligible for standard fire or homeowners insurance.
I sent my insurance to my mortgage company but it was rejected. Why?
Most insurance policies issued by insurance companies are acceptable. However, if your policy was rejected, below are some of the
most common reasons. Your insurance agent should be able to help resolve any problems with your policy.
- Policy does not list us as a "Mortgagee".
- Property address listed on the insurance policy does not match the address of the property on the loan.
- Insurance company rating does not meet our minimum requirements as required by your loan documents
-
Insurance coverage amount is not sufficient to cover full replacement value or the loan balance on your property as specified
by your mortgage company.
- Deductible amount exceeds the maximum deductible as required by your loan documents
-
Submitted documentation is incomplete because one or more of the required information fields is missing for it to be acceptable
insurance.
Why do I need flood insurance?
The Federal government mandates that all federally regulated mortgage companies require flood insurance coverage on properties
located in a Special Flood Hazard Area (SFHA). A SFHA designation is based on flood zone maps published by the Federal Emergency
Management Agency (FEMA). We will inform you if flood insurance is required for your property.
How can I contact you?
If you have any further questions, you may reach our offices at 1-888-834-1812, M-F 8:30am-7pm EST.
|
