Mortgage holder orders homeowners to change insurers

Nords · 05-26-2006, 01:55 PM

Maybe I don't get around much, but I've never read about a bank telling itsmortgage customers that they have to change their insurance company.

Vesta Insurance Group has apparently taken a hard hit on hurricane claims in the southeast. One of VIG's subsidiaries is local firm Hawaiian Insurance & Guaranty. Due to Vesta's deteriorating financial position, HIG's bonds have been dropped to a C+ rating. Bank of Hawaii requires its borrowers' homeowner insurance policies to be from companies with at least a B rating, so BOH has been ordering the switch. People are shopping for hurricane insurance at a time when requirements are tightening and insurers are dropping out... did I mention that the season starts in five days?

http://starbulletin.com/2006/05/26/b...s/story01.html

Brewer, have you been following the news on this trend?

Texas Proud · 05-26-2006, 03:57 PM

I do not see this as a big issue.. as an interested party to your property.. and with the majority of homeowners, the mortgage company having more equity in the property, they want to protect their investment... the homeowner signed a contract and they are just telling them to live up to their commitment.

lazygood4nothinbum · 05-26-2006, 04:25 PM

Quote:

Originally Posted by Nords

did I mention that the season starts in five days?

companies generally issue insurance as long as there is no named storm currently active.

**Martha** · 05-27-2006, 11:02 AM

This is a common mortgage clause and the commercial mortgages I write are even more strict.

brewer12345 · 05-27-2006, 12:29 PM

Thanks for the heads up. Not a good think for the homeowners, since I am pretty sure it will be hard for them to find any coverage, let alone at what price.

Nords · 07-05-2006, 12:30 PM

Looks like the other shoe dropped on HIG and its parent company.

"Vesta Insurance Group is in default on loan agreements and officials say Texas regulators have taken over six of the Birmingham company's subsidiaries."

I see they have branches in Texas & Florida too...

Alex · 07-06-2006, 12:37 AM

It sounds like the Mortgage holders are protecting themselves and their clients to me ( a real win/win). I'd sure want to know if my insurance company rating fell lower than "B".

05-26-2006, 01:55 PM	#1
Nords Moderator Emeritus Join Date: Feb 2004 Location: Oahu Posts: 15,684	Mortgage holder orders homeowners to change insurers Maybe I don't get around much, but I've never read about a bank telling itsmortgage customers that they have to change their insurance company. Vesta Insurance Group has apparently taken a hard hit on hurricane claims in the southeast. One of VIG's subsidiaries is local firm Hawaiian Insurance & Guaranty. Due to Vesta's deteriorating financial position, HIG's bonds have been dropped to a C+ rating. Bank of Hawaii requires its borrowers' homeowner insurance policies to be from companies with at least a B rating, so BOH has been ordering the switch. People are shopping for hurricane insurance at a time when requirements are tightening and insurers are dropping out... did I mention that the season starts in five days? http://starbulletin.com/2006/05/26/b...s/story01.html Brewer, have you been following the news on this trend? __________________ * * For more info see "About Me" in my profile.

05-26-2006, 03:57 PM	#2
Texas Proud Thinks s/he gets paid by the post Join Date: May 2005 Posts: 3,050	Re: Mortgage holder orders homeowners to change insurers I do not see this as a big issue.. as an interested party to your property.. and with the majority of homeowners, the mortgage company having more equity in the property, they want to protect their investment... the homeowner signed a contract and they are just telling them to live up to their commitment.

05-27-2006, 11:02 AM	#4
Martha Moderator Join Date: Feb 2004 Location: minnesota Posts: 9,798	Re: Mortgage holder orders homeowners to change insurers This is a common mortgage clause and the commercial mortgages I write are even more strict. __________________ . Do not rely on the information provided--my posts are not to be taken as legal advice. Needless to say you must consult with your legal representative. I am not responsible for errors. If I offended you with cya I apologize. If I did not, I tried.

05-27-2006, 12:29 PM	#5
brewer12345 Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: Mar 2003 Posts: 9,227	Re: Mortgage holder orders homeowners to change insurers Thanks for the heads up. Not a good think for the homeowners, since I am pretty sure it will be hard for them to find any coverage, let alone at what price. __________________ “When you realize that you are one of the rare few who observe moral principles in their relationships with others, there is a temptation to sink into amorality, not out of conviction or pleasure but simply to avoid further pain, because there is no greater suffering than being an angel in hell, whereas a devil feels at home wherever he goes.” – Martin Page, How I Became Stupid

07-05-2006, 12:30 PM	#6
Nords Moderator Emeritus Join Date: Feb 2004 Location: Oahu Posts: 15,684	Re: Mortgage holder orders homeowners to change insurers Looks like the other shoe dropped on HIG and its parent company. "Vesta Insurance Group is in default on loan agreements and officials say Texas regulators have taken over six of the Birmingham company's subsidiaries." I see they have branches in Texas & Florida too... __________________ * * For more info see "About Me" in my profile.

07-06-2006, 12:37 AM	#7
Alex Full time employment: Posting here. Join Date: May 2006 Posts: 696	Re: Mortgage holder orders homeowners to change insurers It sounds like the Mortgage holders are protecting themselves and their clients to me ( a real win/win). I'd sure want to know if my insurance company rating fell lower than "B". __________________ Oh, you hate your job? Why didn't you say so? There's a support group for that. It's called EVERYBODY, and they meet at the bar.--Drew Carey

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