My son bought a house in December across the street from my home in the Greater Atlanta area. He is currently living in California. He had planned to move here in January, but his wife is pregnant and, due to complications, they have had to postpone their move until after the delivery of my grandchild. It’ll be another two months.
The problem is that because the new house is unoccupied, his homeowner’s insurance policy was canceled. His mortgage holder is making noises of default. We can’t even put somebody in there because we started remodeling the bathrooms and kitchen. That construction isn’t due to be completed until a bit before they move here. We only need an insurance policy for about 50 days, but we can’t seem to find someone to write it.
It seems to us that you should be able to find an insurance company cover the home — if you know what to ask for. We think you might be asking the wrong questions from your insurance agent. It’s quite normal for a house not to be occupied just after purchase while it is being rehabbed. So, unless there’s some crucial piece of information that you’ve left out of your e-mail, there should be a relatively easy solution to your problem.
You should call a good insurance agent in your area and tell him or her that your son recently bought the home, that he’s doing work on the home and that he is due to move into it once the work is completed. While your son may pay a bit more for the insurance during the construction or rehab, at least he should be able to get the coverage he needs until he moves in.
The lender is right to be concerned. If the home burns down, the lender loses the collateral for their loan. The lender might have the right to buy insurance for your son and place it on the home. However, that insurance tends to be quite costly, and some lenders would prefer not to exercise that option.
Under the terms of his loan documents, your son has an absolute obligation to maintain insurance on his home — it’s not optional. If your son fails to maintain insurance on the home, his lender has the right to exercise the remedies set out in the loan documents.
We don’t know whom you have approached about insurance coverage, but we recommend not only calling companies directly but also using an insurance agent who works with various insurance companies. A good agent should be able to find you a company that will work with your son during this time. We’d also recommend that he talk to the company that insures his home in California to see if he can add his home as an additional residence on that policy.
If he calls that company, they may have some options available to him, particularly if he also has his automobiles insured through same company.
Ilyce R. Glink’s latest book is “Buy, Close, Move In!” If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11 a.m. to 1 p.m. EST. Contact Ilyce through her Web site, www.thinkglink.com.