Board-certified real estate lawyer Gary M. Singer writes about the housing market at SunSentinel.com/housekeys each Friday. To ask him a question, go to SunSentinel.com/askpro
Q: We bought a home a couple of months ago that is about 35 years old. We had property insurance for the closing, but later an inspector came out to the house and the insurance company dropped us due to some deficiencies in the condition of the home. Our agent couldn't find us other coverage, even with Citizens Property Insurance Corp., the state-run insurer of last resort. We would have to make major renovations we can't afford. There is no equity in the home to borrow against. What can we do? — Doug
A: Some homes don't qualify for standard insurance coverage. Basically, insurance companies are in the business of assessing risk, and occasionally they find a home that's too much of a risk to be included in their pool of insurance.
When this happens, your option is to go to a "surplus lines" insurance company. A surplus lines insurer is not required to file forms or rates with the state Office of Insurance Regulation. This freedom from regulation allows the insurer to fit the insurance policy to your specific situation. The upside of surplus lines insurance is just that you will be able to get some insurance for your property. Downsides include: your premium or claim is not guaranteed should your insurer go out of business; the insurance typically is more expensive and has more exclusions; and if you cancel the policy early, you may not get back all of the premium for the unused time.
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