Do I have to pay my lender for an insurance policy that they never got if I let my homeowner’s insurance lapse?

UPDATED: Sep 16, 2011

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Do I have to pay my lender for an insurance policy that they never got if I let my homeowner’s insurance lapse?

By mistake I allowed my homeowners insurance to lapse and now the mortgage company wants to back charge me their fee to insure the home for the 3 months it was not insured. I know I agreed to this in the mortgage, however if they not even purchased a policy yet how can they charge me for an insurance policy that does not exist. I have coverage now and is there anything I can do to fight this?

Asked on September 16, 2011 under Real Estate Law, Florida


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If your mortgage company paid for homeowner's insurance for your property due to the fact that you let it lapse by mistake, under the mortgage in place, the lender most likely had the right to place insurance on your property. If the lender wants reimbursement for its expenditure for this, you need to ask for a copy of the policy it placed and copies of documents showing that it in fact paid the premiums for this policy.

Unless the lender can demonstrate that it actually paid the premiums for this insurance to you, you should have no obligation to make any payments to it for it. You should also ask for a copy if the policy of insurance for your records allegedly placed by the lender.

Good luck.

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