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Strauss's avatar

Insurance question: Should a mortgagor (bank) be liable for some or all of the deductible?

Asked by Strauss (20561points) December 2nd, 2015

Fictitious Scenario: Notsobig Bank holds the note on Jake’s mortgage when Jake’s area experiences catastrophic wind and hail damage. Jake is paying for his insurance through the bank, which is also a named stakeholder on the policy. Premiums are included as part of the monthly mortgage payment. So the insurance company adjusters and the contractor agree upon a settlement of $30000, with a 10% deductible. So Jake has to come up with $3000 cash to complete the payment to the contractor. Can Jake get all or part of the $3000 from the bank, since the bank has a stake in the maintenance of the property?

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3 Answers

elbanditoroso's avatar

Nice try, but no.

In every house I have purchased, there have been clauses in that 30-page contract that put insurance and such all on you.

It’s a nice dream, but that’s all.

srmorgan's avatar

The bank compels you to purchase insurance on the house in order to protect their interest in their collateral, your home, They tack the payment onto your monthly bill to ensure the policy remains in force

You purchase insurance to protect your biggest asset, your home,’’

The fact that you purchase and pay your insurance through your bank does not mean a thing.

SRM

jaytkay's avatar

Mortgagor is the borrower. Mortgagee is the lender.

The easy way to remember is “borrower” has to “o“s and so does mortgator.

And @srmorgan is correct about the deductible.

I learned this mnemonic yesterday and I have been dealing with mortgages for many years

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