Property & Casualty Insurance/home owners insurance

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QUESTION: Hi, back in 1996 my Grandmother did a quick claim deed with life estate language. So if she passed away the house would go to my mom. We all lived together in the same house. My Grandmother passed away in 2012, we just kept paying the mortgage but this year we decided to pay off the house. When we called the insurance agent to add my mom's name to the policy she said they would not add on my mom's name and it would not be renewed. We live in florida, can they just drop us like that? We have been paying my Grandmother's mortgage for the past 3 years and the homeowners insurance to. My question is, can they just drop us like that even though we all have lived in the house and my mom has been in life estate since 1996? Thank you.

ANSWER: Hi Elena,

So sorry to hear about the troubles with the homeowners insurance. Unfortunately, insurance companies can cancel for almost any reason, as long as they provide a notice in accordance with state law. Can you please tell me two things: 1) what is the reason given for canceling the policy, and 2) what is the cancellation date of the policy, in other words the date they will not renew it, and what is the date of the cancellation notice. By date of the cancellation notice, I need the date it was mailed to you.

I just want to double check that the notice complies with the law.

James Berliner



---------- FOLLOW-UP ----------

QUESTION: Hi, we didn't get a cancellation notice yet. The agent said they would not renew because the policy was in my Grandmother name and she passed away in 2012. The mortgage was in my Grandmother's name. We just kept paying the mortgage and the mortgage company paid the insurance.  We called the agent and asked them to just add my mom's name on the policy because we all lived together and my mom's name was on the deed, but the agent said she asked the company and they would not add her name. May be the agent asked the wrong way because we did get a letter that said they would not add a name and the temporary  binder would expire in two weeks. Do you have to write a temporary binder just for a name add on. Thank you.

ANSWER: Apologies for the delay in answering. I had a death in the family.

I am a little confused...traditionally a 'binder' is issued for a new policy, prior to the policy actually being printed.   Think of it as a "Temporary policy that becomes void upon the issuance of the actual policy"  So when you say the binder would expire in two weeks, is this referring to a newly issued policy, or the existing policy.  If there is an existing policy in force, will it stay in force but they just won't add your Mom's name?

Seems to me you could simply cancel the policy in your Grandmother's name and get a new policy in your Mother's name, as you indicated that the wording on the deed automatically passes the title of the house to your Mom.  Should be the same price, just a new policy.

Let me know if that will work...

James Berliner

---------- FOLLOW-UP ----------

QUESTION: Hi, I am sorry to hear of your loss. I don't know what she meant by binder. She just said they would not renew the policy because my Grandmother passed away. They are not writing new policies in our area, so when it expires we won't have insurance. My Grandmother passed away 3 years ago, God forbid if we have a claim before it expires I wonder if they will pay or will they say the home owner died 3 year ago so we will not pay because the policy should have been non renewed back then. Thanks

Answer
Elena,
I guess the easy answer is to go to someone else if your current agent can't help you,  and get another homeowners proposal. You should probably do this sooner rather than later.  Hey!  If you shop this around,  it might even be less expensive than the current policy!

James Berliner  

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James R. Berliner, CPCU

Expertise

My specialty is personal and busines insurance, relating to the property and casualty field. Homeowners, Auto, Business Auto, Workers Compensation, Business Interruption, Crime, Directors & Officers Liability, Employment Practices Liability, Professional Liability, General Liability, Umbrella Liability, etc.

Experience

I am the owner of my own agency (established 1970), have obtained my CPCU designation, and am licensed in many states.

Organizations
IIABA (Independent Insurance Agents and Brokers of America), CPCU Society, PIACT (Professional Insurance Agents of Connecticut - Board of Directors)

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