Ask an Expert | Latest Questions

QUESTION: When I was looking for a cheaper homeowner's policy, another company told me that my current homeowners's company will drop me if they find out my house is for sale. Can they do that?

ANSWER: I find the question slightly confusing so I will try to cover all the bases. All contracts of insurance are specific, i.e. they are between you and the insurer, and they only apply to the identified property. So, whoever carries your home insurance will cancel the policy when you sell your home. If you have your home on the market, new insurers will be annoyed if you do not disclose the fact that the property is for sale. There are quite often discounts offered to persuade people to change insurance companies. If you change insurer and sell quickly, the new insurer will not have the chance to recover the discount over time. You may find future insurers load your premium rates on your next home if you adopt a short-term approach.

If you have held the policy for a reasonable period of time, it would be quite unusual for your existing insurer to cancel the policy just because you want to sell your home. In fact, given the depressed state of the housing market right now, it may take quite some time to find a buyer at a price you find acceptable. So long as you continue to pay the premium instalments on time, the insurer should continue coverage. If the insurer threatens to cancel the policy only because you wish to sell, complain to your state's Department or Office of Insurance. The final factor to consider is the mortgage. Mortgagees always have a requirement that you insure the property. Many sell a policy as a part of the home loan package. If you have a home insurance policy tied in with your mortgage, there is no need to worry. The insurer will not cancel unless and until you sell and pay off the loan. If there are problems with an independent insurer, notify your mortgagee immediately as this could affect the terms of the loan.

Hopefully, this answers the question.

Best wishes

QUESTION: When you purchase the homeowners insurance that is included in your mortgage payment, does it cover an accident that a tenant may have in your property. Irent my home out to some tenants. My rental dwelling policy recently was cancelled by my carrier for non payment of premium.

ANSWER: An insurance policy is like any other contract It is only effective between the parties and it only offers the coverage listed in its terms. We cannot guess what is in the contract. You will have to read it. You should also read the mortgage document. However, we will tell you what to look for.

What was the loss or damage?
Usually, the policy drawn up by your mortgagee is designed to protect the collateral, i.e. it focusses on the structure rather than the contents. So depending on what happened while the tenant was in occupation, look to see what perils are covered. If the loss or damage is squarely within the perils listed and not limited or excluded, the next question is:

Who can claim?
Under normal circumstances, only the party to the contract is covered. In mortgage-related policies, this is the title holder(s), their family and anyone visiting with their permission, e.g. friends, neighbors, plumbers and other workers. In the majority of policies, the cover is limited if you are not in occupation. The nature of the risk changes if you are not there to look after the property — tenants are rarely as careful as owners. So if you did not tell the mortgagee you were going to rent out the property, you may have problems. It may actually breach the terms of the mortgage to rent out the property without first getting the mortgagee’s consent. If so, you will have to pay for repairs out of your own pocket and keep the incident quiet. Even if the rental is legal and the damage is structural and covered, the deductible may make it better value to pay for the repairs yourself. Making a small claim goes on your record and may prompt a premium rate increase.

Read the policy and the mortgage deed, but prepare for discouraging news.

QUESTION: hi, i need a home ins. quote for my condo. It's about 884 sf. Second floor,2 bedroom and near fire station (less than a mile),built in 1984. I need a economy plan, excluding personal properties, and fire coverages. Let me know if you need any more info. via email exchange. I can only provide this much info. at this time. Once i get an idea how much, i will provide more info. Thanks, -mike

ANSWER: Hi Mike

Sorry, this site does not work as a insurance agency or brokerage. We do not offer quotes. The search engine here is for you to use. Confirm your state of residence, fill in the questionnaire, and wait for all the quotes to come in from the insurance companies licensed to sell policies in your state. If the detail of the quotes does not quite match your needs, email or telephone the companies offering the most interesting premium rates. By adding detail, you can refine the quotes.

Best of luck in your search for an affordable policy. This site gives you the best chance.

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