Please contact the Division of Banking,
Please contact the Division of Banking, Insurance and Financial Regulation on St. Croix 1131 King Street, Suite 101, 3rd Floor Christiansted, V.I. 00820 Tel: (340) 773-6459 Fax: (340) 719-3801 or St. Thomas 5049 Kongens Gade St. Thomas, V.I. 00802 Tel: (340) 774-7166 Fax: (340) 774-9458 Business Hours 8:00am to 5:00pm Monday to Friday Visit our website regularly to learn about Banking, Insurance and Financial Regulation services in the Territory. Website: ltg.gov.vi If changing insurance companies, it is important that there is no interrup- tion between policies. It is also a good idea to notify the lender of any change in insurance company and provide proof of coverage directly to the lender, instead of waiting for a copy to be mailed from the new in- surance company. To avoid being included on the lender’s force-placed master policy, the borrower must timely present the lender proof of the borrower having purchased his own policy. Pay insurance premiums on time and provide the lender proof of insurance coverage on a timely basis. …
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Please contact the Division of Banking, Insurance and Financial Regulation on St. Croix 1131 King Street, Suite 101, 3rd Floor Christiansted, V.I. 00820 Tel: (340) 773-6459 Fax: (340) 719-3801 or St. Thomas 5049 Kongens Gade St. Thomas, V.I. 00802 Tel: (340) 774-7166 Fax: (340) 774-9458 Business Hours 8:00am to 5:00pm Monday to Friday Visit our website regularly to learn about Banking, Insurance and Financial Regulation services in the Territory. Website: ltg.gov.vi If changing insurance companies, it is important that there is no interrup- tion between policies. It is also a good idea to notify the lender of any change in insurance company and provide proof of coverage directly to the lender, instead of waiting for a copy to be mailed from the new in- surance company. To avoid being included on the lender’s force-placed master policy, the borrower must timely present the lender proof of the borrower having purchased his own policy. Pay insurance premiums on time and provide the lender proof of insurance coverage on a timely basis. Use escrow or premium financing to pay for homeowners insurance pre- miums. A borrower cannot and does not re- new or purchase a force-placed poli- cy directly. You, as the borrower sign and enter into a mortgage agreement when you buy a new home. The mortgage agree- ment makes you responsible for main- taining insurance on the property (which is collateral for the mortgage loan) until you pay off the mortgage loan in full. If you fail to insure your home in the amounts and for the periods the lender requires, the mortgage agreement al- lows your bank/lender to protect its collateral and force-place you. The lender buys a master (or group) policy on behalf of you and others who have an outstanding mortgage but did not buy insurance to protect your mort- gaged property. The mortgage agreement may require you, the borrower, to maintain both a homeowners insurance policy AND a separate flood insurance policy (for a home located in a National Flood In- surance Program Special Flood Hazard Area). You, therefore, can be force- placed for both homeowners and flood insurance, if you fail to provide proof of coverage of each. A borrower has options to pay for his or her own homeowners insurance, by either escrowing the insurance payments along with property tax payments, OR by using premium financing. Premium finance companies are also licensed by the Com- missioner of Insurance. Force-placed insurance is insurance on your property placed by your bank/lender. The bank/lender force-placed you: The borrower does NOT own a force- placed policy. A force-placed policy is owned by the lender, and it covers ON- LY the balance of the mortgage loan the borrower owes to the lender. it covers only the dwelling, and not your contents, other struc- tures and loss of use. if your property is underinsured, you do not have complete finan- cial protection in the event of a catastrophe/natural disaster. Therefore, if you file a claim, you will receive a limited settle- ment amount and may have to apply for a loan to restore your property. Depending upon the amount of this loan, you will likely be required to purchase homeowners insurance. Consumers are billed by the lender for the cost of force-placed coverage. Force-placed insurance is NOT free. Force-placed insurance premiums are generally higher than the homeowners insurance a borrower can purchase on his or her own. When you failed to provide proof of insurance; When the insurance that initially covered the property was canceled or lapsed; or When the insurance covering the property was not sufficient. Force-placed insurance is a form of because: it covers only the balance owed to your lender and not the Re- placement Cost Value; The Federal Dodd-Frank Act requires a lender to provide no less than two notices annually to its force-placed customers, encouraging them to purchase their own homeowners insurance policy and once done, to provide the lender evidence of such coverage. The lender is under no obligation to purchase any particular type or amount of coverage.