Homeowners in Olathe, KS, and other parts of the state might be hearing an unfamiliar term lately. At the AHI Group, we’ve been receiving more calls inquiring about "Force Place" insurance. Callers have been learning about it from their lenders following the lapsing of home insurance policies. So, what does this term mean, and what actions should be taken to avoid it? Here’s what you need to grasp about forced-place insurance.
What is Forced-Place Insurance?
If you have a mortgage on your home, your lender will likely require you to carry homeowners insurance. However, the lender will receive a notification if you fail to maintain payments for this homeowners insurance or cancel it. At this point, they will likely force-place home insurance on the property. Essentially, this means the lender will secure insurance while you will remain responsible for paying for it.
The Problem with Forced-Place Insurance
You should take every possible step to avoid having forced-place insurance on your home.
- It’s incredibly expensive.
- It benefits the lender, not the homeowner.
- It only covers the mortgage balance.
- It doesn’t account for your equity.
- If you miss payments, it could lead to foreclosure.
The bottom line is that you need to maintain your insurance if you hold a mortgage. You’re much better off maintaining your own insurance policy rather than letting your lender force-place insurance on your home.
Get a Home Insurance Quote Today
If you’re feeling the pinch of rising homeowner’s insurance rates in the Olathe, KS, area, we might be able to assist. Contact the AHI Group for a quote today. You may have options. Allow us to be of aid.
