Subject: Seeking Advice on Overcharged Homeowner Policy After Expiration
I recently discovered that my homeowner’s insurance had lapsed last year, and I was completely unaware because I only received eStatements and didn’t review them regularly. When my policy expired, my mortgage company identified the lack of coverage and imposed a retroactive policy to cover the entire year I was uninsured. The cost? Nearly $20,000, which is astronomical compared to my usual premiums of around $6,000. The oversight happened when I switched banks and failed to set up autopay for the new account.
I understand that I didn’t have homeowner’s insurance during that time, but I’m questioning whether they can legally charge me for an entire year of such exorbitant premiums retroactively.
Once I learned about the situation, I promptly reactivated my policy and paid for the 90 days prior to the official cancellation. As a result, I was technically uninsured for only nine months.
I would appreciate any guidance on how to address this issue and potentially recover the $20,000 they charged me. They are currently refusing to issue a refund. Thank you!
I’m sorry to hear about your situation; it sounds incredibly frustrating. Here’s a general approach you could take to address the issue:
Review Your Mortgage Agreement: Check your mortgage agreement to see if there are any specific clauses regarding forced insurance (also known as lender-placed insurance or forced-placed insurance). This will give you insight into the legality of the charges and the extent of your mortgage company’s authority in this situation.
Documentation: Gather all relevant documents, including your original homeowners insurance policy, any correspondence with your mortgage company, and proof of premium payments. This will be essential for any appeal or dispute.
Contact Your Mortgage Company: Reach out to your mortgage company to discuss the charge. Ask for a detailed explanation of how the $20,000 premium was calculated, and explain your situation, including the fact that you reinstated your coverage as soon as you became aware of the issue.
Contact the Insurance Company: If your mortgage company placed the insurance with a specific provider, contact that insurance company directly. They may have policies or guidelines regarding refunds or adjustments for situations like yours.
File a Complaint: If you’re unable to resolve the issue with your mortgage company, consider filing a complaint with your state’s Department of Insurance. They can investigate your case and may be able to provide assistance.
Seek Legal Advice: If all else fails, consulting with an attorney who specializes in real estate or consumer protection law may be a good step. They can provide guidance on your rights and help you understand your options for recourse.
Explore Mediation or Arbitration: If your mortgage agreement includes a mediation or arbitration clause, consider pursuing those options to settle the dispute.
Consumer Financial Protection Bureau (CFPB): You can also file a complaint with the CFPB, which regulates mortgage companies and may be able to assist in resolving your issue.
It’s important to act quickly, as there may be time limits on disputing charges or requesting refunds. Good luck, and I hope you’re able to resolve this matter favorably!