just bought my first property, but i have a problem

[anakokc]

Hi, I just bought my first investment property, and I had already closed on the house. But today, the insurance company called me and told me that they can't insured my house due to bad roof. My question is, shouldn't they told me this before closing? And I remember 3 days before closing there is hail in the neighboorhood that causing damage to the roof. I have a feeling that they cancelled my coverage because of the hail.  I'm not sure what to do now, since I don't have insurance, I'm afraid my lender will fine me. Thank you for your response.

aldy chandra

[$Cash$]

anakokc,

Glad to meet you.

Your lender will put an insurance policy on the house when they find out your policy is cancelled, unless you get a new policy, so make finding one a priority.

If you are in a position to repair the roof then you will be better off repairing the roof as it will save you money in the long run.

You will not like the rates of the insurance company the lender uses as it will be extremely high.

John $Cash$ Locke

[anakokc]

Thanks for your reply Cash, I appreciate it. I spoke to my mortgage broker, she told me the same thing. To replace the roof is going to cost about 2-4K. I plan to sell this house in about 2-4 months. Would it be better to go with lender insurance and then claim the roof or would that be a bad idea. I can't fix the roof right now anyway, not until next month at least, because there is a tenant living there. What should I do? Thank you again for your response

aldy chandra

[$Cash$]

aldy,

It looks like you are going to have to go with the lenders insurance for now.  Do not make a claim on the roof with the insurance company assigned by the lender this could be considered insurance fraud and is not worth the problems it could cause.  You would have to say that the roof was damaged during the new coverage period, as they would not pay a claim prior to them insuring the property and this would not be right.

I purchased a house in a rual area, right after I took possession of the property there was a really bad wind storm which blew off about half the asphalt shingles on the roof.  I could not get any roofers to this area immediately, so I was concerned that if it rained the house would sustain more damage.

I went to Home Depot and purchased rolls of heavy weight sheet plastic and a staple gun.  Then applied the plastic sheets to the roof, this worked out fine until the roofers came and fixed the roof.  It wasn't very pretty but it worked and got the job done as it did rain a few days later.

You could call some roofers explain your situtation and see if they would fix the roof on the if come, they would place a lien on the property and this would be paid when you put together the money to pay them.  It is worth asking, but tell them exactly when they will get paid based on facts you present to them.

Whatever your decision, don't let is slide, adapt, improvise, overcome and the rest will take care of itself.

John $Cash$ Locke

[anakokc]

Thanks again for your quick response, cash. I really appreciate it. I have a question regarding the first insurance who cancelled on me. Can they do that after closing??. My understanding is that if you closed on the house, the insurance would coverage my house and everything is ok, but when I ask this to the agent, she told me she always send people to check on the house after closing, which didn't make any sense at all, shouldn't they check the house before closing? If they would told me this before closing, I could ask the seller to fix the roof first. Like I said on my first post, there was a hail storm 3 days before closing that damage the roof, I have a feeling they cancelled it because of that. Can I do anything with this insurance company? or should I contact a lawyer? By the way, this is an allstate insurance, anyone have bad experience with allstate?
Thanks for your response.

aldy Chandra

[tedjr]

Howdy Aldy:

I would contact the seller and let them file a claim against their insurance company if that is a viable option. if they had a policy in force before you closed. Insurance companies can refuse to write policys or do exclusions for certain things or cancel if they do not like the property condition. State Farm is horrible. I have had them cancel for not having screens on my rental property. A good thing is there is a lot of companies and call around and get a good quote.

Good luck and thank you,
Ted P. Stokely Jr

[pwelborn]

I happen to agree with Ted, it was the previous owners policy who had it covered at time of closing get him to make a claim.