Unfiltered Story #400954

I previously submitted “Urgency on Demand”:

https://notalwaysright.com/urgency-on-demand/347917/

When the renewal invoices for homeowner’s policies are sent out, the banks call us to confirm the property is still insured to the terms of the mortgage. Usually it is just an inconvenience, but sometimes banks move mortages internally and forget the policy needs to be updated. This could be annoying for banks whose clients went with one specific insurance company since this company tended to need two weeks to process a change to a Homeowner’s policy. Most banks were disappointed but understanding, especially since a Binder was valid for 30 days.

It is also worth noting banks always asked to hear “Guaranteed Replacement Cost”; in other words, the house is fully replaced following covered disasters. Due to the fact that it basically means “the company will pay any price that survives a review,” the premiums are also quite high compared to policies that are otherwise identical. The banks were usually finally when I told them about the more practical Additional Dwelling Coverage, a fixed percentage of the Dwelling Coverage on top of the listed limits, though this did require a calculator to confirm the amount is satisfactory for the mortgage terms.

Then there was one bank agent who was calling for a policy with the aforementioned slow-to-process company. And her bank moved the mortgage internally without notifying us.

Tuesday the 1st:

Bank Agent: “And does the property have Guaranteed Replacement Cost?”

Me: “No, but the Dwelling is endorsed to cover 175% of the listed coverage amount; that comes to $962,500.”

Bank Agent: “Okay. I’ll send the form for the Mortgagee change now.”

Me: “Perfect. And like I said, I can get you the Binder as soon as that request comes in, but the Dec page probably won’t be ready until the 15th.”

Bank Agent: “Thank you.”

The form came in about half an hour later, and the Binder went out five minutes after that, complete with the note outlining the Additional Dwelling Coverage. I processed the change, and began the waiting game…or so I thought.

Wednesday the 2nd:

Bank Agent: “Has the Dec Page come in yet?”

Me: “Sorry, no. Not unusual for [Slow Insurance Company]. Probably the 15th. We might get lucky and get it sooner, but certainly not before the 8th. And as soon as it’s in, I’ll send it over.”

Bank Agent: “And it has Guaranteed Replacement Cost, right?”

Me: “No, the endorsement package only includes an extra 75% on top. So while it says $550,000, the dwelling is actually covered for $962,500.”

Bank Agent: “Okay, thank you.”

Rinse and repeat every weekday up to and including Thursday the 10th.

I tried to vary how I explained it to see if my wording was the problem, but otherwise it was the same questions and the same answers every day. Always at 10:30. The Guaranteed Replacement Cost question is a typical tactic from the banks to make agents say something on a recorded call they can hold against us, so I initially did not think much of it, but most bank agents figure out we are not going to fall for it after the first try. By the end of the first week, just to cover my bases, I made sure to check the replacement cost. As expected, $550,000 was great coverage. Unless the outstanding balance on an ordinary house purchased more than a decade earlier was about $1 million, the Guaranteed Replacement Cost question should just be the bank trying to screw us.

Finally, Friday the 11th, the Declarations Page was in. An hour before she could call, I gathered it up and sent it over to the bank. At 10:30, she still called.

Bank Agent: “The Mortgagee is fine, but does the policy have Guaranteed Replacement Cost?”

Me: “No, [Bank Agent]. We’ve been over this several times. The Dec Page has it in plain print: Additional 75% Dwelling Coverage. That is a total of $962,500. Is there a problem with this amount?”

Bank Agent: “It has to have Guaranteed Replacement Cost.”

Me: “All it needs is enough to replace the entire dwelling and meet [Bank]’s useless clause in the mortgage contract that requires the Dwelling Coverage to match the outstanding balance on the mortgage despite the fact that we do not pay the mortgage ever. I know the base $550,000 replaces it in a normal market. Does the $962,500 cover the balance on the mortgage?”

Bank Agent: “Yes.”

Me: “So what’s the problem?”

Bank Agent: “It’s not Guaranteed Replacement Cost.”

I gave up.

Me: “Explain the problem to your boss, then have your boss call me back.”

I never got that call, and I did not hear from her again. I have no clue if that was genuine ignorance or someone too stupid to realize persistence was not working. Either way, the client did not paid for a homeowner’s policy other than ours.