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Insurance Law/Insurance gap on trailer

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Question
Because I was late on my last payment , which I did try to pay online , in which they reversed the debit and created my account back.  So my trailer was not covered for 4 months, now the credit union which holds the loan On my trailer place there own coverage for 4 months and it is costing me 5,000.00 dollars for that coverage.  Is that legal?  I did not know my regular insurance company credited back the payment to my account.  Now my payments have been doubled on the trailer, which I can't afford right now.  Any information
This is insuranced in Massachusetts

Answer
Susan,

I am sorry to hear about your difficulty.

In all likelihood, there is language in your loan documents which covers the requirement to have insurance in place to cover the mobile home's value and specifically, the credit unions interest as the mortgageholder. That language generally gives them the right to place insurance on the property if there is evidence that you do not have it yourself.

However, there are basic stipulations which they must follow and that is the amount being charged for the policy must be fair and reasonable, especially in light of the fact that their policy is a special policy which allows for properties to be added and removed as needed over time. That type of policy should have a reasonable cost associated with each property and $5,000 for 4 months of coverage is outrageous, especially for a mobile home. (I barely pay that much for a home insured for $300,000!)At most, they should have paid the amount that you were paying for the insurance and then you would have to make that amount up in the additional payments.

There are class actions around the country on this type of predatory financial dealings and you may want to consult an attorney or talk to a local legal aid clinic to get legal help. I would suggest you do that as soon as possible. Also, if you can, you need to get your own policy back in place so they cannot continue to charge for their policy.

Hope this helps.


Kevin Hromas
JD, EGA, RPA, PLCS, CPIU, HCRI-R/C, WIND® Umpire/Appraiser
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Kevin Hromas

Expertise

I am a licensed, executive general adjuster currently holding a Texas resident P&C license (614250), New Mexico non-resident all lines license (248774), Oklahoma non-resident P/F/M license (A299561), Florida non-resident P&C license (E117051) and a National Flood Insurance Program certification (06040100). My areas of expertise involve property and casualty issues in both residential and commercial policies with regards to claims practices and issues. I deal extensively with Lloyd's of London commercial policies and various domestic carriers for residential policies.

Experience

After a 20 year career as a General Contractor, I was employed by Allstate Insurance as an adjuster in Texas, holding various postitions within the property claims department. After leaving Allstate, I specialized in handling losses associated with major catastrophes through-out the country. (Hurricanes Isabel, Charlie, Wilma, Katrina, Ike, etc., hail storms, floods.) I am currently retained as an expert by multiple insurance defense firms in Texas for issues in litigation. I am also a certified Umpire for formal appraisals.

Organizations
Member - Society of Registered Professional Adjusters Fellow - Council on Litigation Management Member - Property and Casualty Association Member - Texas Independent Insurances Adjusters Association Member - National Association of independent Insurance Adjusters Member - Houston Claims Association

Publications
Claims Magazine (www.ClaimsMag.com and then search 'Kevin Hromas' for a full listing of articles and quotes.) www.ClaimsPages.com, www.ProAdjuster.org, www.KevinHromas.com

Education/Credentials
JD - University of Houston Law Center - 1992 BA - Southwest Texas State University - 1980 AA - South Plains College - 1977 PLCS - Personal Lines Coverage Specialist

Past/Present Clients
Certain Underwriters at Lloyd's, London, Fulbright & Jaworski (Law Firm), Bracket & Ellis (Law Firm) Thamm & O'Briant (Law Firm) Sheehy, Ware & Pappas (Law Firm) Walker, Wilcox and Matousek (Law Firm) Financial Guarantee Underwriters

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