Subject: Help Needed: Unfair Retroactive Homeowners Insurance Charges
I recently found out that my homeowners insurance policy expired last year, but I had no idea because I was only receiving eStatements and didn’t notice the lapse or resulting cancellation. When my policy’s renewal date came, my mortgage company flagged the lack of coverage for that entire period and retroactively charged me for a full year’s policy—almost $20,000! Typically, my premiums are around $6,000. I had neglected to set up autopay after changing banks, which contributed to the situation.
I understand I was without homeowners insurance, but is it legal for them to impose such an exorbitant retroactive charge? Once I discovered the issue, I promptly reinstated my policy and paid for the 90 days of missed premiums leading up to the official cancellation. So, I was only actually without coverage for 9 months.
I need guidance on how to address this situation and reclaim the $20,000. The mortgage company is refusing to issue a refund.
Any advice would be greatly appreciated!
I’m sorry to hear about your situation; that sounds incredibly frustrating. Here are some steps you can take to address the issue with your mortgage company and potentially get a refund:
Review Your Mortgage Agreement: Look at your mortgage documents to see what they say about insurance requirements and forced-placed insurance. Typically, lenders are allowed to place insurance if property insurance lapses, but they must charge a reasonable amount.
Contact Your Mortgage Company: Reach out to their customer service department to discuss the charges in detail. Be prepared to explain your situation and ask for a detailed breakdown of the retroactive coverage they provided.
Request Documentation: Ask for any documentation that supports their charges, including the terms of the retroactive policy, the coverage limits, and how the premium was calculated.
Negotiate: If you don’t find the charges to be justified, try to negotiate a more reasonable amount. Since your typical premiums are significantly lower, emphasize this point, and let them know you have resumed coverage.
File a Complaint: If negotiations don’t lead to a satisfactory outcome, consider filing a complaint with your state’s department of insurance or the Consumer Financial Protection Bureau (CFPB). They may be able to assist you in resolving the issue.
Seek Legal Advice: If you feel that you are being treated unfairly, consult with a lawyer who specializes in consumer protection or insurance law. They can help you understand your rights and options.
Document Everything: Keep a record of all communications, including dates, times, and the names of representatives you speak with. This may help if you decide to escalate the issue further.
Explore Other Insurance Options: While you’re working through this issue, shop around for homeowners insurance quotes to find a policy that fits your needs and budget.
It’s important to communicate clearly and assertively while being persistent in your follow-up. Good luck!