Q's On Foremost Insur. after barn burn

[rio002]

Hi all, about a month ago the barn burned down and we are still in the trenches with Foremost Insurance.I had some questions for you guys after talking with our Insurance Person "Erica" at Foremost this morning. She said the check for the personal property that was in the barn will be in our names only But the check for the replacement of the barn structure will be in our names and our mortgage companys' name (Countrywide) because they have "interest in the property too". Now this made no sense to me on many levels but primarily because the barn wasn't even here when we bought the place--we built it ourselves 4 years ago and we have been here for 10 years. She assured us that this is very common, and that when the check came we would just have to call our mortgage company and they would send us to one of their banks and could then fax a signature releasing the amount to us OR we could just send the check to our mortgage company I know darn well if we were dumb enough to send it to the mortgage company they would simply say Thanks and apply it to our mortgage loan--which is not where we need it to go, we Need to rebuild asap. So is that legal? If the check comes that way should we lawyer up? Are there questions we should be asking them? One fear is that we may not even have a bank here that deals with our mortgage company--and then what lol? I swear there is more wind whistling through that womans' head then the Holland tunnel, she really sounds like an idiot on the phone But I have been very nice so as not to delay things even further. I am still ready to spend the winter fighting for the coverage we paid for, and honestly don't see why they would have a problem just cutting a check since our barn coverage was only for $8400 and our estimates to rebuild professionally have all come in at $20,000 plus.

[hengal]

Rio002 -

I can speak from experience on this one. Our barn burned down in January of 05'. We received two separate checks - one for the contents and then a week or so later, one for the amount the building was insured for. Both of these checks were in our names only - had nothing to do with the mortgage company at all, and it was covered under our homeowners the same as the house.
(Trust me - we did learn however that we did not have enough coverage on the barn when it came time for estimates to rebuild. Had to do some fancy foot work but we were able to get a beautiful new 64' x 44' barn for right around $19,000. We obviously added more coverage after the new one was built! ) Good luck to you with the rebuild and the whole process.

[Silvercreek Farmer]

Your mortgage company is probably listed on your insurance as "loss payee" meaning they get paid for any losses. I would go ahead and get on the horn with them to try to get them to call the insurance company and tell them to either cut the check to you or figure out how they are going to handle it. Your mortgage probably reads "The property and ALL improvements located at (your address here)", meaning the minute you built your barn it became part of their collateral. Good luck, I work for a Bank and try to take good care of people who may not understand the process for these type ofthings, unfortunatly most people just try to get rid of you...

[bgraham]

rio002,

I've not dealt with a barn loss, but a friend's house burned down and the insurance co check was made payable to both them and the mortgage company. They had some hassles because they wanted to do some of the rebuild work themselves to save money. I'm not sure of the details, but they got it worked out in the end.

Beth

[farmergirl]

Speaking from the insurance business perspective, I would say that this sounds quite normal. Foremost is a well-known, respected insurer. I would think they should handle the claim appropriately.

[tink67]

We had approx. $35,000 worth of hurricane damage to our house 2 yrs ago when Hurricanes Frances and Jean came through. We received 2 checks, 1 for contents (made out to me only) and 1 for the house damage (roof, ceilings, walls, floors, etc.) The check for the house damage was made out to my mortgage company and me. I called the mortgage company to see how to handle it. They told me NOT to endorse the check before mailing it to them for their endorsement. Without my sig, they couldn't have done anything with it. They promptly endorsed it and sent it back to me so I could cash it and begin making repairs.

Now, I know of some mortgage companies who required the homeowner's signature first. Some of those companies held onto the money and reimbursed homeowners as they made repairs. Meaning, the homeowner had to pay out-of-pocket, submit receipts and hope the mortgage company kept their word.

Bottom line, if that's how your insurance company handles it, it's most likely because your mortgage company requires it. But call the mortgage co to find out where to send it and find out exactly how it will be handled. Good luck!

[morrowsmowers]

We had an insurance check made out the same way a number of years ago. We had to send it to the mortgage company and they stamped an endorsement on the back and then we could endorse and cash it. I understand that this is done so that if you are trying to defraud the mortgage co. they have some manner of control over the funds. I imagine if someone were behind on their mortgage they might want to use some of the funds to pay it up but that should not happen in a normal situation.

Ken in Glassboro, NJ

[TnAndy]

Legal ? Sure is.

When you built the barn, it became part of the real estate, which was mortgaged.

Your mortgage company likes you for this, because you have made the property more valuable, and reducing their risk.....didn't they sent you a fruit basket ?

There is also an UPside to increasing the value of a place by doing this.....if you have PMI ( private mortgage insurance ), which is common if you borrow more than 80% of the APPRAISED VALUE AT THE TIME of a property, by increasing the value of a place, you 'might' drop under the 80% amount, and thus get to cancel the PMI portion of your mortgage payment.....which can sometimes be a substantial amount.

Worth looking into IF you are in this boat !

[rio002]

OK, good to hear guys, I was really worried they were gonna end up with the check and us up a creek! We have always good relations with our mortgage co. so I'll buzz them Monday morning, and discuss the matter. Thanks so much!

TnAndy--You're completely right on the PMI, our mortgage co. called us this spring and said our property value had increased from 130K to 250k due to the area and it didn't hurt that those selling around us were getting on average 350k for their places. They let us know we were in the right percentages and canceled our PMI in which every little bit counts right? Though I hadn't thought of it in the way you pointed out, that basically until it's paid for I'm really just improving the property for their resale lol. Thanks for your help!

[Christiaan]

We had Foremost many years ago and were very satisfied with their service. We had a tree fall on our mobile home on Christmas Eve. I remember they were very embarrased because we had to stay in a very dumpy motel in our little town, they would have preferred putting us somewhere nicer but we needed to get the kids to school. The agent also told me what work I could do myself and they would pay me the same as a professional. Then the because we had to stay two weeks longer at the motel than originally planned the motel owner doubled the rent. The agent cut us a check for that amount, but told me to tell the motel owner to p*** up a rope and pay him at the older rate. It worked and we got to keep the differance!!! Nice company!

[TnAndy]

rio002,


Sounds like you have a great company to work with in that THEY called you about the PMI.......I doubt there are many mortgage outfits out there that would do that ! Stories I hear are you normally have to really bug them to get it off your payment.

Consider yourelf among the lucky !! ....and good luck with your rebuild.