Posted: Tue Sep 25, 2007 2:20 pm Post subject: Chase requiring me to get more Flood Insurance
I just received a letter form my mortgage company, Chase Manhattan Mortgage Corp, that my current flood insurance policy is not adequate and they are requiring me to raise my coverage by $20000, if I don't Chase will obtain the insurance on my behave at a higher rate. My current policy is $4000 over what I owe Chase Manhattan Mortgage Corp on the mortgage. My VA home loan was sold to Chase sometime in 2002 after a year with the original lender. My flood insurance policy has been the same since I purchased the home in 2000.
Is there any guidance you can give me on this matter, I have searched the internet and have found other home owners with flood insurance are in the same situation as I am but no solutions. This seems like a very unfair practice and only benefits Chase and their Insurers.
Welcome to the Community Strat I live in a flood plain also.
If your insurance hasn't gone up since 2000, you are pretty lucky! The cost of repairing flooded homes have gone up, thus the insurance, or at least that's what I have been told.
Has there been any flooding in your area since 2000?
You might want to go over your policy- we found out-too late- that they didn't consider our home flooded, but having "back water", which is absurd, it came from the creek that is across the street from us!
As to how much the premiums have gone up, someone here may be able to anser if their is a ratio that they go by, etc..Good Luck..KAren
By the way- flood plain is different that a flood area here. They consider us in a flood plain, but my neighbor in a flood area- go figure!
I am in a flood plain, right next to a major river, It has flooded but I have never made a claim on the policy because there hasn't been a need to.
My issue is with my mortage company, can they require me to put more flood insurance on my home when the my policy now covers more than what I owe the mortgage company?
Thanks..... _________________ Register Now to have your Insurance queries solved.
For homeowners living in the flood prone areas flood insurance act as a qualifying parameter for the mortgage loan. Flood is the sole natural disaster which causes the maximum damages in US. The coverage level depends on the location of your home, number of inmates, whether the residence is flood resistant or not, and so forth.
However, the mortgage company may ask you to increase the flood insurance coverage if they come to know that according to the revised flood map your property is now situated at Special Flood Hazard Area (SFHA). But to know the real reason you have to consult the lender.
You can also consult the Flood Insurance Rate Map (FIRM) or flood insurance study report available with the National Flood Insurance Program, to know the effective insurance rates of your locality.
if I don't Chase will obtain the insurance on my behave at a higher rate
This is standard, even in auto leins, if the owner doesn't carry (what the leinholder or mortagee considers adequte coverage they will do this).
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My current policy is $4000 over what I owe Chase Manhattan Mortgage Corp on the mortgage
It is based on 'rebuilding' not the loan amount (unlike a vehicle which is insured for the actual cash value, and not a stated amount like a home).
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My flood insurance policy has been the same since I purchased the home in 2000.
I'm surprised by that. Maybe your state just now started to 'require' inflation protection. In my state it was voluntary for many years, but several years ago it became manditory. In other words every year when the H.O. policy comes up for renewal they increase the value by a percentage. Used to be able to refuse this, however no more. The reason behind this is. People were sueing their carriers because their home was insured for the same amount (like you said same since 2000). They suffered a total loss, the limit hadn't changed and inflation dictated that home would cost 25% more to rebuild, so companies were sued for not providing adequite coveage. Understand? Check your homeowners policy as well as see if it didn't 'go up' every year. Not just the premium but the limit of the 'dwelling' coverage.
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By the way- flood plain is different that a flood area here. They consider us in a flood plain, but my neighbor in a
flood area- go figure!
karen brings up a good point. My brother also was in a 'flood plain' that required flood insurance, (hadn't flooded for literally 100 years), he didn't know this till he got to closing ! He was successful in getting it changed, (the classification), and then was able to drop the flood insurance. If that is at all possible in your area you should look into it. What is required to be considered a flood plain (or manditory flood insurance) and if there has not been any flooding for many years, see if you can get this area re-evaluated.
Sorry I didn't see your second post, next to a river chances are not good you could get this changed...
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My issue is with my mortage company, can they require me to put more flood insurance on my home when the my policy now covers more than what I owe the mortgage company?
Yes, I believe they can (see above re:inflation protection and check your homeowners policy too, I will bet it has increase every year as I said otherwise they would be brining this to your attention as well). The main reason is this. Let's assume that your flood insurance for 100k. Your house floods, and to rebuild your home is 200k, well what are you going to do? If you do not have that other 100k, maybe you will just 'walk away'. (I know you likely wouldn't but it happens), now your mortgage company is left owning a flooded home that they cannot sell.
See if when this is added
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raise my coverage by $20000
It isn't equal too (or darn close) to what your H.O. policy has as your dwelling limit.
I think this is the sole reason behind all of this.... I surely understand your frustataion, given (especially) the high cost of flood insurance.
Also, something I found out on the first flood was it isn't like homeowners,or it was't back then. When we were out of our home, they don't pay for a hotel or someplace to go like homeowners does.
We ended up out of our home for 7 weeks, had to rent a house get emergency items like clothes, etc., and Red Cross is who helped us, not the flood insurance.
I had to get a state senator on them to even get a check-3 months later!
Hopefully it has changed by now, and they don't de-value your property and possessions so much.
Alwasy ask if you are going to be in a flood plain or flood zone if you are considering buying a home!!..Karen and I must say- having flood insurance is a whole lot better than having nothing- we have done both!!
I live in a flood plain also.
I didn't see your second post, next to a river chances are not good you could get this changed...
