When investing in properties, it is typical of lenders to require borrowers meet certain requirements in order to obtain the necessary funds. Specifically, lenders state that property insurance must be acquired by the borrower. Though this is not a complicated request, there are times when the borrower might find that the coverage is no longer present. In this scenario, it can be important to understand what your options are and how a solution like force-placed insurance might be able to help
Why Does Force-Placed Removal Occur?
There are a number of reasons why a borrower might experience the risk of force placed insurance removal. For one, common mistakes like forgetting to pay the premiums required annually on a plan can lead to cancellation. A policy can also expire without a policyholder realizing it, leading to the removal of insurance. Borrowers often make oversights with their plans that can lead to cancellations without warning, such as trying to secure insurance in an area that is of a higher risk than the primary mortgage. Other circumstances to consider can include:
- Outstanding premium payments being completed
- Finding willing underwriters
- Reinstating lapsed or expired coverage
How To Cover All Your Bases
When it comes to your insurance coverage, you always want to make sure you are thinking about worst-case scenarios. By reviewing these details in advance, you can find a policy that covers all potential hazards and provides you with peace of mind.