Forced Place insurance

[scott2000]

https://floridapolitics.com/archive...ardrails-to-lender-placed-property-insurance/

Homeowners insurance companies are raising rates astronomically and dropping people left and right.
New roofs will be all but forced on homeowners every 15 years in the future from what I'm hearing from some...

If you have a $40k principal on your half million dollar home with a decent roof....and homeowner's insurance company wants to drop you??? Forced place insurance is scary but....is this new law supposed to make it not as scary?.....

I'm sure they will try to force insurance rates based on the higher of the choice between your last policy amount or your principal . Could you legally drop your homeowner's policy to the principal left on your home? Probably not I'm guessing

anyway..what does this part mean?....
In the event of a covered loss — damage to the property for which the insurer is financially liable — the replacement cost the insurer pays beyond the unpaid principal balance of the mortgage loan goes to the lender.

 

[Matador]

It means that the lender is only entitled to force you to buy insurance for the portion of unpaid principle that they hold on the property, rather than the cost of insuring the entire property. On the flip side, it also means that they will only effectively pay up to the value of their principal in a claim.

 

[Matador]

With your example, if you owe $40k on your million dollars property, the lender can only force you to buy $40k worth of coverage, not 1 million.

 

[Youngwhisk]

I was in the roofing supply business for 33 years. In my area of Canada, it has been the case for at least 10 years that the insurance company required a shingle roof be replaced after 20 - 25 years if I recall correctly, no matter what the warranty is on your shingles.

 

[scott2000]

It means that the lender is only entitled to force you to buy insurance for the portion of unpaid principle that they hold on the property, rather than the cost of insuring the entire property. On the flip side, it also means that they will only effectively pay up to the value of their principal in a claim.

Looking at our mortgage hazard insurance authorization and requirements it says

coverage must be in an amount at least equal to the replacement value of improvements on the property or the loan amount, whichever is less. I guess that says the same. But yeah, having a pile of sticks with no mortgage doesn't sound ideal either...
Loan amount could/should be implied principal left perhaps..Thank you.. Stuff is confusing.

I was in the roofing supply business for 33 years. In my area of Canada, it has been the case for at least 10 years that the insurance company required a shingle roof be replaced after 20 - 25 years if I recall correctly, no matter what the warranty is on your shingles.

That sounds reasonable. I think you can't even get a policy if the roof is more than 15 here. Some companies 10 years I hear. And a roofer I spoke with said, as of a couple of years ago, it doesn't matter if you have 30 year shingles, every 15 years they're going to come at you again... Not sure all the dust has settled here yet but, looking online and at some of the talk in the neighborhood forum, it's not looking very good.

What a mess..

I know 5 years ago my sister was able to get an inspection and fend off the insurance company for a while since it said the roof had another 5 years. Not sure that flies today.