Talk about bad luck...

[CHCRandy]

I have a friend of mine who had a tree fall on their house about 2 weeks before X-Mas, caved the house in and resulted in it having to be completely rebuilt. The same day the tree fell on the house she got a letter in mail from homeowners saying they were cancelling homeowners coverage because the house needed repairs to be insurable. Apparently she had just got homeowners a few weeks earlier, and bought it online...when the insurance inspected property, the underwriters wouldn't cover it. After some back and forth the insurance agreed it was their responsibility and paid tree claim. Well her, her husband and kids have been rebuilding this home since January. My crew finally installed a new roof on it 11 days ago and they finally had started the interior work. Last night/early this morning the house and detached garage burnt to the ground, absolutely nothing left....it's all gone! I don't have a clue how this will work out for them. About 60-70% of work was completed and now there is nothing. This fire was so hot it melted siding on neighboring houses that were 200 feet away or more.

So now this insurance company received 1 months payment and has already paid $50,000-60,000 claim, mortgage company is holding 1/2 that and now I guess insurance will be on the hook for another max payout....OUCH! I have always said these agents should inspect property before insuring, and this is why.

I thought I was bad luck Shamrock.........this makes me feel lucky. Any of you ever had such a thing happen? I replaced a hail damaged roof once and while we were installing new roof we got another huge hail storm and destroyed the new roof before it was complete...insurance just paid it again, but that was a lot cheaper than this is.

 

[jgressley2003]

A brand new house burnt down? Sounds like arson

 

[CHCRandy]

A brand new house burnt down? Sounds like arson

I have seen a few new construction homes/apartments burn to the ground...the most recent one that comes to mind besides this one is the apartments in Fishers a couple years ago. I think they will find this one started because of a burn barrel and wind, but not sure yet.

 

[dudley0]

I have always said these agents should inspect property before insuring, and this is why.

I never have my place inspected prior to by insurance. Have had a couple of occasions where I needed to update something quick like. I know what they need as a minimum now so I don't worry.

Selling a house on contract and the buyer is using a different insurance company. They insured and then inspected. They didn't like a couple things and he had to scramble to get them fixed in order to keep coverage.

If the company just said they were cancelling and didn't give any warning that is uncool on them. Now if the house was un-tenable to begin with then I can see them thinking it was fraud in the making.

Guess it just depends on the agent you use, and the amount of money you spend on insurance with the agent.

Bad juju either way... someone put a curse on that place. Fix it and sell it fast...

 

[CHCRandy]

I never have my place inspected prior to by insurance. Have had a couple of occasions where I needed to update something quick like. I know what they need as a minimum now so I don't worry.

Selling a house on contract and the buyer is using a different insurance company. They insured and then inspected. They didn't like a couple things and he had to scramble to get them fixed in order to keep coverage.

If the company just said they were cancelling and didn't give any warning that is uncool on them. Now if the house was un-tenable to begin with then I can see them thinking it was fraud in the making.

Guess it just depends on the agent you use, and the amount of money you spend on insurance with the agent.

Bad juju either way... someone put a curse on that place. Fix it and sell it fast...

I think she got the homeowners online or the mortgage company got it, either way she had paid payment, they accepted payment then sent letter refusing to cover unless some improvements were done, but it didn't arrive until a couple days after the tree fell and claim was filed. BTW, The tree was not theirs. And another thing, the burn barrel got ruled out...they hadn't used it in 2 days. Leaning towards electrical issue with a freezer maybe.

You know, all in all, they are lucky. She is lucky she got homeowners before the tree fell. She is lucky it fell before they cancelled her. She is lucky no one was hurt when the tree crushed the house. And she is lucky the house was vacant when this fire happened, so no loss of life. She is lucky none of her personal belongings were in the house that was under construction. It's just all how a guy looks at it, half empty or half full. I agree with you, I would sell it and start over.

 

[jsharmon7]

Being investigated as an arson, with reward offered for info...

 

[GodFearinGunTotin]

Whoa!

 

[CHCRandy]

Being investigated as an arson, with reward offered for info...

Wow, Didn't really see that coming. Does that mean they know someone started it or they just ruled out any other ways?

 

[churchmouse]

How do you get a Mortgage on an untenable house and not be covered. The Mortgage company/bank requires coverage and will force place it if the owner fails to do so.
In this current climate FHA and related home lenders will not underwrite such a home. There has to be more ton this one.

 

[DoggyDaddy]

I think she got the homeowners online or the mortgage company got it, either way she had paid payment, they accepted payment then sent letter refusing to cover unless some improvements were done, but it didn't arrive until a couple days after the tree fell and claim was filed. BTW, The tree was not theirs. And another thing, the burn barrel got ruled out...they hadn't used it in 2 days. Leaning towards electrical issue with a freezer maybe.

You know, all in all, they are lucky. She is lucky she got homeowners before the tree fell. She is lucky it fell before they cancelled her. She is lucky no one was hurt when the tree crushed the house. And she is lucky the house was vacant when this fire happened, so no loss of life. She is lucky none of her personal belongings were in the house that was under construction. It's just all how a guy looks at it, half empty or half full. I agree with you, I would sell it and start over.

I dunno... maybe not?

[video=youtube;DBSAeqdcZAM]https://www.youtube.com/watch?v=DBSAeqdcZAM[/video]

 

[dudley0]

How do you get a Mortgage on an untenable house and not be covered. The Mortgage company/bank requires coverage and will force place it if the owner fails to do so.
In this current climate FHA and related home lenders will not underwrite such a home. There has to be more ton this one.

If you use a conventional mortgage there is far less red tape.

Every house that I own I have bought and then called the insurance agent to add it to the list. Any that I get with a mortgage I call the agency and tell them where to send proof of insurance. This is typically done before they see the place.

Only one time have I had to change the policy after, and I knew it was coming. Place was uninhabitable up front... and just a little more than the agency could deal with as is. Brought it up to spec in short order, *****ed at the agent for not having my back and moved on to the next one.

FHA, VA, USDA and a bunch of other lettered agencies have to pre-approve the loan. That involves an inspection on site. I have provided quotes to the lender stating what was to be done and they give a time line but pass the loan thru anyhow. Just finished a rehab loan job. The owners are already in it, but the final inspection just took place this week.

All depends on if you know the ropes to jump thru up front.

 

[churchmouse]

If you use a conventional mortgage there is far less red tape.

Every house that I own I have bought and then called the insurance agent to add it to the list. Any that I get with a mortgage I call the agency and tell them where to send proof of insurance. This is typically done before they see the place.

Only one time have I had to change the policy after, and I knew it was coming. Place was uninhabitable up front... and just a little more than the agency could deal with as is. Brought it up to spec in short order, *****ed at the agent for not having my back and moved on to the next one.

FHA, VA, USDA and a bunch of other lettered agencies have to pre-approve the loan. That involves an inspection on site. I have provided quotes to the lender stating what was to be done and they give a time line but pass the loan thru anyhow. Just finished a rehab loan job. The owners are already in it, but the final inspection just took place this week.

All depends on if you know the ropes to jump thru up front.

Yes this is the process. But even some conventional lenders will not do this. The inspections on any mortgage have to be done up front to my knowledge. The spouse was in the business (loan officer) north of 17 years. We owned 29 rentals at one point. All were distressed when we bought them. Paid cash to get into the game with the 1st 2. Terrible shape. Un-livable. Rehabbed and then got a mortgage. Used that to fund the next one and so on. I am well aware of the ropes. Once you get into the game it is easier but 1st time buyers are usually not aware. Unless they get some help.

 

[dudley0]

Yes this is the process. But even some conventional lenders will not do this. The inspections on any mortgage have to be done up front to my knowledge. The spouse was in the business (loan officer) north of 17 years. We owned 29 rentals at one point. All were distressed when we bought them. Paid cash to get into the game with the 1st 2. Terrible shape. Un-livable. Rehabbed and then got a mortgage. Used that to fund the next one and so on. I am well aware of the ropes. Once you get into the game it is easier but 1st time buyers are usually not aware. Unless they get some help.

It was tougher, then the market boomed and anyone could get a loan with a signature. Then the market fell flat and nobody was getting anything. Now it has stabilized a little bit.

Lender inspections and insurance inspections are two completely different animals now. I am selling a place on contract. I have a mortgage on it. The lender doesn't care because it is me, and the numbers work. Buyer had to supply his own insurance. He got it, then they did an audit and sent him a letter of cancellation unless he brought the house up to the inspector's standards.

You can get a conventional loan from so many places... some of which just look at google maps or do a drive by BPO to decide if the house is worth the burn.

 

[CHCRandy]

This home has been in the family for 60+ years. Their mother died a few years back and the one brother (my best friend) died last year of cancer and other brother is a lifer in DOC. I think the home was paid off many years ago and the sister must have gotten a loan on it from the local bank. Not sure who insured it bank or homeowner, but I know it was insured by a high risk company that is a part of Farmers. I know for a fact they cancelled her too late, technically.....I guess they could say they cancelled her after the tree but before the fire, I don't know how that works. I still bet they find it wasn't her or her family who set it on fire...... they have nothing to gain and everything to lose, including that first $50,000 and weeks of work that they spent to re-build home. If you was gonna burn it down, do it before you spend the settlement and time to rebuild. Makes no sense.

I am still betting against the obvious...maybe I just have too much faith in people.

 

[HoughMade]

This home has been in the family for 60+ years. Their mother died a few years back and the one brother (my best friend) died last year of cancer and other brother is a lifer in DOC. I think the home was paid off many years ago and the sister must have gotten a loan on it from the local bank. Not sure who insured it bank or homeowner, but I know it was insured by a high risk company that is a part of Farmers. I know for a fact they cancelled her too late, technically.....I guess they could say they cancelled her after the tree but before the fire, I don't know how that works. I still bet they find it wasn't her or her family who set it on fire...... they have nothing to gain and everything to lose, including that first $50,000 and weeks of work that they spent to re-build home. If you was gonna burn it down, do it before you spend the settlement and time to rebuild. Makes no sense.

I am still betting against the obvious...maybe I just have too much faith in people.

As you mentioned, the tree damage had to be covered as there has to be notice of a cancellation for there to be an effective cancellation. One exception to that is if they find out that there were fraudulent misrepresentations in the application. Then the coverage can be void ab initio (from the start). There are other things that can result in the same thing. Sounds like they determined that there was nothing like that.

IF they cancelled prior to the fire (as opposed to cancelling, then deciding not to cancel), then there is no coverage unless the fire was caused by something that had to do with the construction due to the tree that was covered...and even then, they may have a fight and there would certainly be disputes between the homeowners' insurance and any contractors' insurance.

 

[churchmouse]

It was tougher, then the market boomed and anyone could get a loan with a signature. Then the market fell flat and nobody was getting anything. Now it has stabilized a little bit.

Lender inspections and insurance inspections are two completely different animals now. I am selling a place on contract. I have a mortgage on it. The lender doesn't care because it is me, and the numbers work. Buyer had to supply his own insurance. He got it, then they did an audit and sent him a letter of cancellation unless he brought the house up to the inspector's standards.

You can get a conventional loan from so many places... some of which just look at google maps or do a drive by BPO to decide if the house is worth the burn.

Yeah it has changed. We stopped playing in 06-ish when we sold off the last block and got out save for 3 on contract. Those were mortgaged late last year. We are free and clear.

 

[CHCRandy]

Thought I would post this to maybe clear up any confusion on how they cancelled her. Looks like she had insurance, then they cancelled her and since they were own contractors.....no general liability insurance. When fire happened home was not insured apparently. I am not asking anyone for donations for them, I just posted this so you guys can read her story.

https://www.gofundme.com/arson-fire-homeless