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  1. #1

    Default Can a Private Individual Insure My Home

    My question involves insurance law for the state of: michigan

    Hi. When i bought my home i had good credit. The carrier i was with valued the replacement at 180000$.

    4 years later i am divorces and as a result my credit is in ruins. My carrier went bankrupt and dropped me, so i had to find a new carrier.
    Basically all the companies gave about the same quote. 3k a year and a 5 k deductable. Sick.
    In addition they are all giving me replacement costs of around 300k. I paid 80k for my home, while i know it would cost more than that to rebuild, i know it wouldnt cost 300k!
    The guy across from me purchased land and built a very nice home for far less than that.
    I offered the carrier i went with(encompasa) at my expense to have a builder come in and give a replacement estimate, but they refused, stating they only go with what their computer estimates.
    I contacted my mortgage company to see if i could cover it for less than what the carrier states is the replacement. They told me i must cover it for whatever the carrier states is the replacement.
    This seems bogus to me, that basically means the carrier can claim it costs whatever they want to replace the home, and im forced to pay it.
    Im wondering if i could get my parents, a relative, or friend to insure the home to reduce my rate. Ive owned a hone for 7 years and never had a claim.
    Also im curious if my home were a total loss and it turns out to only take 200k to repkace it, will the carrier allow me to build a 300k home?

    Thanks

  2. #2
    Join Date
    Mar 2013
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    Default Re: Can Someone else Insure My Home

    Quote Quoting dead_onion
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    I contacted my mortgage company to see if i could cover it for less than what the carrier states is the replacement. They told me i must cover it for whatever the carrier states is the replacement.
    This seems bogus to me,
    It is bogus.

    Did it every occur to you to read your mortgage contract to see what the insurance requirement was?

    I think you'll find that you might only be obligated to cover the house for at least the amount of the loan.

    Quote Quoting dead_onion
    View Post
    that basically means the carrier can claim it costs whatever they want to replace the home, and im forced to pay it.
    I don't know where you are finding these insurance companies but I suggest you find a large independent insurance agency (that represents several companies) where an agent can do a proper replacement cost evaluation and find you a policy.

    You can even do it yourself. There are many replacement cost estimators online.

    Do several and compare them, then go see an agent.

    Quote Quoting dead_onion
    View Post
    Im wondering if i could get my parents, a relative, or friend to insure the home to reduce my rate. Ive owned a hone for 7 years and never had a claim.
    That's called insurance fraud.

    Quote Quoting dead_onion
    View Post
    Also im curious if my home were a total loss and it turns out to only take 200k to repkace it, will the carrier allow me to build a 300k home?
    No.

    Which is why you need a reputable agent and a proper replacement cost evaluation.

  3. #3
    Join Date
    Sep 2005
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    Default Re: Can Someone else Insure My Home

    If your contract with your lender requires you to insure for replacement value, then that's what you agreed to do when you borrowed from that lender. If you believe you can find another lender who will be more flexible, locate such a lender and refinance.

    The question of what your insurance policy would end up covering in the event of a total loss is something you would determine by reading your policy.

    - - - Updated - - -

    Quote Quoting adjusterjack
    View Post
    It is bogus.

    Did it every occur to you to read your mortgage contract to see what the insurance requirement was?
    He wrote, "I contacted my mortgage company [and t]hey told me i must cover it for whatever the carrier states is the replacement.", which makes it appear that his lender confirmed the requirement that he insure for the cost of replacement.
    Quote Quoting adjusterjack
    I think you'll find that you might only be obligated to cover the house for at least the amount of the loan.
    That's something he will have to determine by reading the mortgage contract.
    Quote Quoting adjusterjack
    That's called insurance fraud.
    I don't think it gets that far. I can't imagine the bank buying into the notion that "Mom's insurance" or "Uncle Jim's insurance", insurance provided by a private individual who has not complied in any way with state insurance laws or regulations, is sufficient to satisfy the requirement that insurance be maintained on the property.

  4. #4
    Join Date
    Mar 2013
    Posts
    17,616

    Default Re: Can Someone else Insure My Home

    Quote Quoting Mr. Knowitall
    View Post
    He wrote, "I contacted my mortgage company [and t]hey told me i must cover it for whatever the carrier states is the replacement.", which makes it appear that his lender confirmed the requirement that he insure for the cost of replacement.
    And you'd rely on some dipstick who answers the phone at the mortgage company?

    I wouldn't and suggest that nobody else do it either.

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