Insurers say the mortgage industry is creating an insurance crisis

NEW ORLEANS (WVUE) – Amid the ongoing insurance crisis some mortgage companies are being blamed for some of the homeowners who are suffering after their coverage was canceled by insurers who failed, or left Louisiana after Hurricane Ida.

Ross Fayard owns Amstate Insurance.

“For whatever reason, the mortgage industry is pulling,” Fayard said.

When it became known that some insurance companies canceled thousands in late June and mid-July, Insurance Commissioner Jim Donelon announced that agents will have 60 days to establish policies from failed insurers and Louisiana Citizens, the state’s last insurer. .

Mr. Donelon’s office said, “With this change, citizens will be able to provide coverage for Lighthouse Excalibur and Maison policy holders from June 30 to August 28, and for Southern Fidelity policy holders from July 16 to September 13, as long as sponsors will establish laws and Citizens by 60. -last day, and it is a risk that fulfills Citizens’ guidelines.

The problem, according to some insurance companies, is that some mortgage companies that pay out insurance premiums to homeowners have not acted quickly enough to meet the deadline.

“We call the mortgage company, we call the mortgage company, we put it, the mortgage companies are taking forever to pay, so even Citizens allows you to pay back the money you have to pay, and the mortgage companies are dragging their feet and when they pay, think what the expansion is over,” said Fayard .

And as a result, some homeowners are hit with lender-mandated cover that can be very expensive.


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FOX 8 asked Donelon about the problem with this story.

“I have heard about the threat of mortgage companies, I have never heard of it being used here. “Sometimes it’s better for a borrower to force a property because of their financial plan and the company that’s forcing them,” he said.

Fayard says, “If they get forced treatment with your agent because you know, you’ll know when $5,000, $6,000 in your level, you’ll know, so what I advise you to do is, get it with your agent, get a record if you have insurance with my office you can come here, We will give you like a diary of what we did, what we did, when they did it, who we talked to,” he said.

Fayard said he spoke with a customer on Friday (Sept. 23) who had a similar problem.

“And sure, they had a forced policy now. Now what I did was I uploaded a new invoice with a binder that works today that will immediately end the forced hiding, but I feel pain because now you have to review your refund, it’s a headache. ,” he said.

Robert Cagle, an insurance broker with TWFG Insurance says he has worked long hours to find new coverage for clients who were terminated this year.

“It was a big job to get people to have insurance so not everyone calls, not everyone and they don’t know until the lender forces them because the lender will protect their interest,” he said. .

Donelon recommends that insurance customers who are affected by the insurance policy should contact his office.

“I encourage anyone, agent or client to call us, 800-259-5300, we work closely with the office of financial institutions and enable them to deal with borrowers any issues like this,” said Donelon.

Fayard says that as far as insurance is concerned it’s a good idea to get insurance coverage.

“If you can’t call your agent, call your insurance company and say, look, I just want to make sure I have coverage because with all the craziness that’s going on there’s a good chance the ball was dropped somewhere,” he said.

Donelon remains optimistic about the plan to attract more insurers to the state. He has asked to use his department’s collection that usually goes back to the state fund as the starting money for the “Insurance Louisiana Incentive Program”.

If they get $5 million, they have to invest their $5 million, and then they have to double the $10 million or $20 million in new business and stay in that business at least. five years,” Donelon said.

However, his office said the fund must be identified by the Revenue Estimate Committee and then approved through the BA-7 legislative process before it can be allocated to the program. The REC does not meet again until December.

Cagle says he’s praying Louisiana doesn’t get hit by a hurricane this year.

“I think when the storm passes the role of some of the companies coming up is better than it is now,” he said.

And Fayard offered this advice to people seeking refunds from the Louisiana Insurance Guaranty Association called LIGA.

“When you start paying your money back, don’t send a check to your escrow because if the check is lost it’s difficult to try to stop the check which is what I advise you to do. find it and put it in your account, your account,” Fayard said.

He said the money could be used to lower the monthly mortgage payments.

“Let’s say the refund is $2,000, take it and then write a check to your escrow for $2,000 and when your check clears the bank, call them, and say, look, I can do my research to get my house. Paying, it’s important because the refund checks are going to be distributed.”

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