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A Tip from the Wildfire Preparedness Committee - Lender-placed Insurance
Lender-placed Insurance
Have a safe and Happy Halloween this weekend. But what would be scary to an adult is a letter from your mortgage lender, saying that you need lender-placed insurance.
So what is lender-placed insurance, also known as force-placed insurance? If you have not provided proof of insurance to your mortgage lender, they will get insurance for you, or potentially they could foreclose on your loan. Such forced coverage is usually quite expensive. See the NAIC explanation here.
In my personal case, I had opened a home equity line of credit 10 years ago, before the current wildfire crisis. Recently, I received a letter in the mail saying that I had 15 days to provide proof of insurance coverage, or the bank would institute a lender-placed insurance policy at a cost of $2,235. I resolved the issue, but it took a lot of time and gave me a small fright. 👻
Lender-placed insurance falls under CA and federal banking regulation, not the CA Dept of Insurance. Happy Halloween! 🎃
Please subscribe to Portola Valley eNotices from the WPC and eNotifications from WFPD.
PV homeowners are encouraged to participate in the WPC’s on-going 5-minute insurance tracking project. Go here to report on your home insurance availability and affordability.
San Mateo County Alert System SMC Alert is our primary emergency notification system. Encourage all adult members (18 and older) of your family to subscribe.
All the Wildfire Preparedness tips are on the committee’s page. To rate this tip or submit questions or concerns, please fill out this Google Form