What will the bank do if I cannot get home insurance?

If you do not maintain homeowners insurance on your property, the bank will force place a policy. This means that the bank will purchase a policy which normally costs 3 to 4 times what you are currently paying for homeowners and furthermore it will usually only cover the home up to the amount you owe. Your personal property will not be covered. Neither will your interest in the home above the mortgage amount and you will not have personal liability coverage.

The mortgage company will add the cost of the insurance to your escrow account which will probably cause you to have a negative escrow account resulting in a substantial increase to your monthly payment.

If I were you I would do everything possible to get that roof substantially repaired (the insurance company will accept a repair if the roofing company certifies that the roof is now in good condition) or replaced. Roof leaks can cause substantial interior damage, mold and even fires. The insurance company is right for requiring that you replace your roof.

If you can't replace it, you might want to try to see if the FAIR Plan for your state will insure you. They might be willing to at least write a fire policy for you--which provides limited coverage but is still acceptable to the bank. The FAIR Plan is a quasi-governmental program that provides property insurance for impaired properties. To find the FAIR Plan for your state google FAIR Plan along with the name of your state or contact a local independent agent to help you apply. Getting a FAIR Plan policy (if they approve you) gives you the advantage of a lower cost than the forced placed policy the bank will try to force on you and will therefore along you time to get the money together for a roof replacement.

Once you have repaired the roof you should have no problem obtaining insurance in the standard market place.

I hope this helps. Good Luck!

Your insurer is correct. A hard rain should not cause water leaks to the inside of the house. A roof in good condition prevents same. And I hope you didn't make a claim based upon minor damage from the water leaks.

No insurer is going to want to take on the risks of further damage to a house with a roof which is not water secure.

If you cannot provide insurance because of this situation, the lender will 'force place insurance' on your house. Such insurance is extremely expensive, and will not cover YOU, but will cover the lender only, such that they are reimbursed for damages or total destruction of your house.

If you pay for this forced insurance for two years, you would have been able to replace the roof for the cost of two years of insurance premiums.

I went through the same thing when I bought my home in 1982, my then current auto insurer didn't want to insure the house because they thought it needed a new roof. State Farm insured me with no problems. It was 15 years before I replaced the roof!

Have you shopped around? If you cannot obtain insurance coverage on your own, the lender will force-place insurance for you (likely at much higher rates). Either find alternate insurance or (better yet) replace the roof.

The Fair Plan is a good place to go if you can not get insurance. And, no one will insure you with a bad roof.