by strat751 » Tue Sep 25, 2007 02:20 pm
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.
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.
Posted: Sat Aug 07, 2010 03:33 pm Post Subject:
To all those who are "angered" by Chase:
This is not about Chase, it's about fulfilling your personal responsibility when you choose to purchase a dwelling in a "high-risk flood area". And it's not BS either.
But it is what happens when insurance companies ask for, and get, a "pass" on having to cover catastrophic risks and the federal government steps in to run an insurance program. (It is a small example of actuarially-sound rate making, which the government fails to do with Social Security and Medicare -- the two largest money losing insurance plans on the face of the planet which, combined, are heading toward an $87,000,000,000,000 shortfall by 2040, just 30 years from now. Just this week, they were forced to admit they are paying more in claims than they are taking in in premiums. But that's a different story.)
If you own your unit and it is located in a high-risk flood area, you will be required to purchase flood insurance if your lender is federally regulated or insured.
The statement above comes directly from the http://www.floodsmart.gov/floodsmart/pages/residential_coverage/condo_renter.jsp website for the National Flood Insurance Program. Regardless of who your mortgage was underwritten by, and although you don't indicate where you reside, you condo is apparently in a high-risk flood area of some sort, and you are required to have coverage.
Since you failed to obtain your own policy, your lender followed the rules imposed on all (federally-regulated) lenders and purchased it for you. Whether you like it or not, it's the law, and it's for your protection.
Now, it may be that because your Condo Assn also purchases the NFIP protection, which Chase may not be aware of, you could be overinsured, which is not to your benefit, and the Chase-purchased policy might need to be reduced. Then again, the Condo Assn policy probably only covers the property, not your contents, and the Chase-purchased policy may cover your contents in addition to the dwelling.
You don't provide enough details (# of condo units, first or second story, property value, location, etc) for us to give any better answer. You can use the link to find more contact information for the NFIP and can speak with them directly to determine if your coverage is correct or not.
If you are overinsured, then purchasing your own policy instead of letting Chase do it for you, is the responsible thing to do. Until then . . .
Posted: Thu Sep 16, 2010 02:46 pm Post Subject: chaseflood insurance policy
Now chase is saying fema is making people pay flood insurance for the full dwelling replacement of there homes. This is not true my State Farm Agent contacted
FEMA and that is not true. You only have to pay for the cost of your loan. So lets not let them get away with this.
Posted: Thu Sep 16, 2010 02:46 pm Post Subject: chaseflood insurance policy
Now chase is saying fema is making people pay flood insurance for the full dwelling replacement of there homes. This is not true my State Farm Agent contacted
FEMA and that is not true. You only have to pay for the cost of your loan. So lets not let them get away with this.
Posted: Thu Sep 16, 2010 11:56 pm Post Subject:
Mandatory Requirements
[From the FEMA NFIP website]Homes and businesses with mortgages from federally regulated or insured lenders in high-risk flood areas are required to have flood insurance.
Well, I suppose if you don't want the government to cover your full loss, but only pay what you owe on the loan, you are entitled to make a very poor decision like that. Most folks would want to be in a position to recover their full loss (minus any deductible, of course).
Your decisions about insurance do not have to be made full speed, you can certainly make any or all of your insurance decisions half-fast.
From the homeowner page on the FEMA website I posted above, comes the following advice:
Homeowner
As a homeowner, it's important to insure your home and its contents. Depending on your property location, your home is either considered at high-risk or at moderate-to-low risk for a flood. Your insurance premium will vary accordingly.
If you choose to only insure your home for the value of your unpaid loan, you are also limiting the coverage the policy provides for your contents, since it's a % of the property coverage. That, most certainly, is an unwise decision. Ever heard the expression, cutting off your nose to spite your face?
You may think you're getting one over on your lender, but your family will have a different impression if your home and everything in it is one day sent downstream. Flood insurance is not about your lender, it's about you and your property.
And, I assume that if you had no mortgage, in your mind you would not have a need for flood insurance? In that case, your loss is 100% your responsibility. FEMA is prohibited from offering you any additional assistance, such as relocation or reduced rate loans, if you do not have a NFIP policy.
Posted: Fri Jan 20, 2012 10:35 am Post Subject: flood insurance after escrow closes
A couple of months after escrow closed, Chase informs of the need for flood insurance to the tune of $2250. Faxed the FEMA statement (again) that the structure is in MODERATE zone. Too bad, Chase DENIED the request to remove the required flood insurance...the $2250 a year stays. Now what?
Posted: Fri Jan 20, 2012 04:39 pm Post Subject:
Did the loan agreement have any clause in it about purchasing flood insurance? If it was in the loan agreement, then you would have to buy flood insurance even though your property is situated in a moderate risk zone.
Posted: Fri Jan 20, 2012 06:03 pm Post Subject:
The issue is that apparently you never provided proof of coverage under an NFIP policy, so Chase procured one for you. They are permitted to charge you a "fee" for that.
Did the loan agreement have any clause in it about purchasing flood insurance?
Understand that this is NOT a "Chase thing", and Heller may not be fully informed on this. If your loan is FHA-guaranteed, and the property is in an identified flood zone (as it is), all lenders are required to see that the property has valid NFIP coverage. You do not have to purchase it from your lender. But when you don't do it on your own, your lender MUST do it for you.
Contact your Homeowner's Insurance agent/broker and have them get you what you need at the correct price for your zone and the value of your property.
Once you have your own NFIP policy, you can demand that Chase terminate theirs. There could be a cancellation fee assessed, but it cannot be unreasonable. Again, Chase cannot require you to obtain the policy only from them. But until you get your own, you are stuck with theirs. Regardless of the cost.
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