Insurance company failed to include me (mortgagee) as loss payee on fire loss?
What requires insurance companies to include the mortgagee on loss payments for REAL property(substantial)? As mortgagee (me), their claim is that their only obligation to me is the balance of the mortgage. But they paid the insured more than the cost of the property in seven payments and failed to include my name on any of the payments. Insured took the money and ran (I probably would have to..) because he was better off financially than using the proceeds to restore the property. I learned about the loss (fire) when the insured defaulted on the mortgage and I called the electric company to restore service (couldn’t to a burned out structure). I was clearly listed as mortgagee on the policy. Had a real estate contract that stated that in case of default, all payments became rent and I took back posession of the property. Can they really get away with having failed to include my name on loss settlement payments? I feel that they encouraged the insured (mortgagor) to default on my loan.
Tags: Insurance, insurance companies, loss payments, loss settlement, money, Mortgage, mortgagee, mortgagor, obligation, proceeds, real estate contract, settlement payments
If you have a copy of the policy naming you as mortgagee, and the insurance company failed to include you as mortgagee on the payment check, they are obligated to pay you up to your interest in the policy – AS MORTGAGEE. That means, the balance due on the mortgage. THAT’S IT. They do not owe you OWNER balance, because they paid that to the OWNER, who wasn’t you.
An insurance policy is a contract. If you were worried about anything ABOVE the mortgage balance being insured, you should have taken out your OWN policy, or kept yourself as named insured on a dwelling policy.
Your real estate contract, well, too bad! That’s between you and the guy you sold the place to. The insurance company does NOT have any obligation to you, other than as mortgagee. That’s a major hazard with land contracts – which sounds like what you might have had. That’s why people don’t want to act as mortgagees! Too much risk.
sue both of them
what you should have done is put your name as the owner and had them pay you off until the property was paid in full. listing them as a named insured also (both names on the policy) this way you both have financial interest in the property. An insurance company can only take instructions from the insured, not the mortgagee. next time i’d advise you always ask for a certificate of insurance (like banks do) if you’re not on it, then break the contract between you and the other person (just make sure it’s written into the contract they sign)
The insurance company is not required to include the mortgagee in the policy. The mortgagee is the one who has to require to be named in the policy. If you are named in the policy and have a copy to prove it, then the insurance company is at fault and you have a very good case