Home Mortgages & Fire Insurance
Many times, when consumers are financing the purchase of their home, there are provisions in the mortgage contract that state that fire insurance must be kept on the home to protect both the borrower and the lender. The fire insurance documents are drawn up along with the mortgage contract and the borrower signs off without any chance for negotiation. Throughout the term of the mortgage, the borrower must pay a premium to the fire insurance company for providing the insurance. Unfortunately for many consumers, these bundled mortgage / insurance packages can be constructed in a way that advantages the insurance companies and mortgage lenders at the expense of the consumer, in addition to being in violation of state law.
Insuring Replacement Value or Repurchase Value
Most people don't think twice about the insured value of the fire insurance when they sign their contracts; it seems intuitive that the amount insured would be equal to the principal of the mortgage. This, however, is not the purpose of fire insurance. Fire Insurance is supposed to cover the cost of replacing (i.e. rebuilding) a home; and this is necessarily less than the cost of re-purchasing the same home. This level of over insurance is not only unnecessarily expensive to the consumer, it also violates many states' laws about fire insurance.
Contact Us
Seeger Weiss LLP is investigating claims of home buyers who were obligated to pay for fire insurance that exceeded the replacement value of their homes for a class action. If your mortgage lender required you to sign up for fire insurance, please fill out the contact form linked below. Attorney consultations incur no obligation on your part. All initial consultations are free of charge and do not create an attorney-client relationship. Seeger Weiss LLP has office locations in New York, New Jersey, Pennsylvania, and Oklahoma and its attorneys are available to practice in courts throughout the country.
Link To Lawyer Seek's Mortgages & Fire Insurance Content:
<a href='http://www.lawyerseek.com/Practice/Consumer-Protection-C21/Mortgages-Fire-Insurance-P200/'>Mortgages & Fire Insurance: Lawyer Seek</a> |
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