Anyone who is — or is looking to be — a homeowner in California knows that insurance in our state is “a situation.” Nestled between restrictive state regulations, rising building costs, and natural disaster occurrences, many insurance carriers are pulling back on coverage or placing so many hurdles to obtain it that some folks are calling this a crisis.
To date, there’s been much press around this: why we are here and what we can do about it. I strongly urge everyone to educate themselves on this subject because if you live here, it affects you in one way or another. This article instead serves to outline a bit less covered topics: the mechanics of how it impacts borrowers on the day to day.
If you have a mortgage, your property is required to have hazard insurance coverage. The idea is that the insurance provider will help rebuild structures should something disastrous happen. Your mortgage holder is listed on your policy in your “Mortgagee Clause,” which tells the insurance company who to contact if something has happened and when you are trying to cash a check to repair that same something. As a homeowner, it’s your obligation to ensure your insurance is up to date — and servicers typically require reverification annually.