My mortgage company paid my insurance late and my insurance was cancelled. Can the insurance company legally do this? What recourse do I have with either my insurance or mortgage company? Insurance is rather difficult to get right now in California. What can I do?
TOM RIFOLD asked 2 weeks ago 1 Answers
This is a frustrating situation that many California homeowners are facing. Yes, insurance companies can legally cancel policies for late payments, even if the late payment was your mortgage company’s fault. Most policies have a grace period and require notification before cancellation, but beyond that, they are within their rights to cancel. Your mortgage company likely violated their servicing obligations since they’re responsible for timely insurance payments from your escrow account. You can:
-File a formal complaint with your mortgage servicer
-Document all communications and payment records
-File a complaint with the Consumer Financial Protection Bureau (CFPB)
-Consider consulting with a real estate attorney, as you may have grounds for damages if their negligence leads to higher insurance costs
You should also contact the insruance carrier immediately to explain the situation and request reinstatement of your policy. Ask them to waive any reinstatement fees given the circumstances, and if they agree to reinstate your policy, get this in writing and provide it to the mortgage company. Best of luck.
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