QUESTION: 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?
-DougANSWER: 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 insurance regulator. 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.ABOUT THE WRITER:Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.
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