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Florida Insurance Agent Problems (continued)

The Rental Building Insurance Policy Is Cancelled

As the changed and cheaper policies had not been notified to Citizens at this point (the $2183 would have covered both easily), they applied that sum to the home policy and there was no overage available for the rental building policy. It was cancelled and when I spoke to Citizens representative, Zaida Montoya, she said that the cancellation letter was sent April 3.

Did we get that cancellation letter? Yes we did, and I contacted NF straight away on a Saturday night. It was April 8, 2006. She reassured me that Citizens give mortgage companies a 90 day grace period before canceling policies. Like me, she assumed that Citizens knew it was an escrow payment. However, why would they cancel the insurance policy if they give the loan servicer a 90 day grace period. This should have been a red flag to her.

When the policy changes that I had insisted upon with NF were implemented, Citizens at least sent back the overage. It was explained to me that there was no link between the two policies and that it couldn't have been applied to the second insurance policy.

Then, while I was in Australia, the news came that the policy was cancelled for real. However, on April 15, Citizens's guidelines and premiums for buildings older than 50 years changed. This is where the punishment really occurred. The premium rose almost $500 from the $953 we had been quoted to $1469.

My wife said "The most frustrating part about it was NF's lack of response at times.  I only got responses when I emailed or called Steve (her boss) for help. At the least she should have been in constant contact at least pretending she was trying to solve the problem.  Instead we had to chase them down for answers. Bad Business."

We Would Have Paid A Higher Premium "Eventually".

So when the policy was finally reinstated or recreated in the first week of May, we were paying the new higher premium. NF's response to this was, "well, you would have to pay it anyway eventually".

The key word is "eventually". I should not be paying the increase for 2006 at all if it weren't for the original mistake.

If we had been able to take action at the time of this cancellation notice, then as it would have been before April 15, then the additional premium we are now paying for having a home older than 50 years would not be an issue.

Who is at fault?

Anyway, if I were to apportion blame, it would have to be:

Me: 15% for not noticing the insurance proposal was marked billed to insured and that the bill was for me and not the loan servicer. You assume as a customer that everything but the effective date of the policy was changing when we closed a little bit late.  I assumed because we paid money into escrow that it would be taken care of.

The mortgage servicer: 15% for sending the payment in at the last moment and not thinking to contact the insured or insurer for details about the policies that they were paying the premium on. Though apparently this is normal in the loan servicing industry. In fact, Citizens gives the escrow companies 90 days to get the premium in!

If only the consumers were to have such generous consideration bestowed upon them when paying insurance premiums.

Much as I'd love to blame them, it looks like Citizens comes off relatively cleanly here.

70% of the responsibility would have to be due to the policies being erroneously marked as bill to insured and the lack of follow up when the cancellation notice came in.

I did put my story in writing to NF and asked her "You said that you may be able to help us here. In the interest of continuing the broker's good reputation I am sure that we won't have to bear this extra premium burden alone." Very diplomatically I have hinted to the broker is that the right thing to do would be to compensate us in some way, but each time nothing ever happens.

Force Placing Insurance

The loan servicer contacted me saying that they were going to force place insurance because they thought I was uninsured due to the gap in my coverage when the policy was canceled. The insurance broker promised that they would have all that resolved. Apparently that was taken care of, and for that they should be congratulated. Though I have heard that sometimes, force placed home insurance can be cheaper than Citizens!

The Resolution From My Broker

I think what you are saying is that when we requoted you for the same coverage that your renewal we for $1257.00 the premium would have been about $1700.00.  If we use the $400 # in your blog I would be willing t do something.  We are not Citizens with billions.  We are like you trying to make a living and do the right thing.  Also despite the large increases that Citizens demands they have also capped the agent commissions but nobody talks about that.  I talked to my partner and without admitting any "guilt" errors caused by you not looking, Nat checking off the wrong box, the escrow people not sending in 2 checks, and Citizens NEVER sending us a cancellation notice, that's 4 people into $400.00 = $100.00 each.  So if you'll take that as payment if full for our error and remove our names from the blog, (you can leave the story because I'm sure this is not the first time or the last time something like this will happen) we can call it even and resume a better relationship.  I'm sure no one else will step up to the plate.  What do you say???

The Numbers

Home size: 1400sf, replacement cost: $151,174
Homeowner's Insurance Premium on April 1, if my broker hadn't screwed up: $953
Homeowner's Insurance Premium on April 15 after Citizens increase for homes 50+ years old: $1469
I had to take deductibles on hurricane of 5% ($7559) and other perils of $2500 to get it even that low.

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