What is our recourse if our homeowner’s insurance policy was falsified by the insurance agent?

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What is our recourse if our homeowner’s insurance policy was falsified by the insurance agent?

We obtained and closed on a home loan about 2 months ago. We signed for a loan that included our insurance and property taxes in the monthly mortgage payment and left the rest to the mortgage broker and insurance agent. We got an email from our insurance agent stating that we need to pay over $500 today and $184 a month for our insurance premiums in order to not be dropped from our policy. After much back and forth with him and our mortgage broker, we found out that our premiums were not paid for this year through our escrow account because the insurance agent had marked our premiums as paid in full on the paperwork required to obtain our loan. He says that he did this at the request of the mortgage broker. The broker says that we are being misled

by the agent. We are required by our lender to have insurance on our property at all times, so letting it lapse is not an option but paying hefty premiums on

top of our mortgage when the mistake was not ours and documents were falsified without our knowledge. We are unsure how to move forward.

Asked on May 25, 2018 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If you suffer any losses due to someone else's (like the insurance agent or broker) negligent (careless) or intentionally wrongful act, you can sue the at-fault person(s) to recover your loss. So if money was taken from you without being used to pay for insurance, you can sue to get that money back. If you can show that you end up paying more for insurance now because of how you had to buy it than you should have, you can potentially recover that additional cost. Etc. So once you identify the costs or losses you have incurred, you can sue anyone who may be liable for your loss to recover compensation.


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