8 min read
Jan 15, 2025
Force Placed Insurance Exclusions Homeowners Don't Expect
Homeowners often assume that if they are paying for insurance, they are fully covered. With force placed insurance, that assumption can be dangerous.
No Personal Property Coverage
If your home burns down, force placed insurance might rebuild the walls and roof, but it usually pays $0 for your furniture, clothes, electronics, and valuables.
No Liability Protection
If a delivery driver slips on your icy driveway and sues you, standard insurance usually helps. Force placed insurance typically offers no liability protection, leaving you personally exposed to lawsuits.
Maintenance Exclusions
Like standard policies, force placed insurance does not cover wear and tear. However, it may also have stricter exclusions regarding neglected maintenance or pre-existing damage.
Frequently Asked Questions
Is theft covered?
Theft of personal belongings is generally not covered because contents are excluded.
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How to remove force placed homeowner insurance
A Simple Exit Plan That Often Works
Once you understand how you arrived at force placed coverage, the next goal is usually to replace it and restore full protection.
01
Secure New Coverage
Shop for a policy that fits your specific situation, whether through standard insurers or high-risk "excess and surplus" markets.
Ensure your new coverage restores the personal property and liability protection that force-placed policies often omit, and verify that dwelling limits are based on replacement cost rather than just your loan balance.
02
Submit Proof
To cancel the lender’s policy, you must provide a complete proof of insurance package.
This typically includes a full declarations page and the servicer's specific mortgagee clause—including your loan number—to prove your coverage meets the minimum requirements of your mortgage contract.
03
Confirm Cancellation
Once your servicer accepts the proof, they will typically cancel the force-placed policy and issue a pro-rated refund to your escrow account.
Monitor your account to ensure the refund is applied and that your monthly mortgage payment is recalculated to reflect the lower insurance costs.