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Updated almost 8 years ago on . Most recent reply

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David Rutledge
  • Irvine, CA
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insurance policy cancelled whats next?

David Rutledge
  • Irvine, CA
Posted

I have a few rental properties that I have recently purchased. I received a letter from my insurance company today stating that they had to cancel my policy due to water damage to the ceiling of one of my units.

I only purchased the property a few months ago and I had an inspection done that did not show anything like this nor have I heard anything from the contractor that my property management company had go in to the property to take a look.

None the less this is obviously something I am going to have to take care of. My immediate concern however is how this cancellation of insurance will affect my mortgage on my loan. I am worried that if I am not able to secure insurance with another company while I fix this problem that my loan may be called due by my lender.

Does anyone have any knowledge or experience with this kind of thing? I am only new to the investment world, what should my next course of action be to ensure my mortgage remains in tact. This has really blind sided me and I am pretty worried. 

Most Popular Reply

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Wayne Brooks#1 Foreclosures Contributor
  • Real Estate Professional
  • West Palm Beach, FL
13,510
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23,418
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Wayne Brooks#1 Foreclosures Contributor
  • Real Estate Professional
  • West Palm Beach, FL
Replied

Step 1 of course, find new insurance.

No, the bank won't call your loan, But they will secure Force Placed insurance, which they have a right to do, and it will costs 2-4 times what you'll pay for your own policy, and will have worse coverage, and you will of course have to pay for it, or be foreclosed on.

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