October 7, 2017

We are already receiving reports that insurance companies are delaying damage claims made as a result of the recent hurricanes, adding insult to the injuries that homeowners have suffered at the hand of Mother Nature. Unfortunately, this is nothing new.

For years, we have had to actually litigate the “rights” to insurance checks issued to homeowners in foreclosure whose homes were damaged or destroyed by natural disasters. Although the insurance checks are supposed to be used for repairs to or replacement of a damaged home, the checks are made jointly payable to the homeowner and the servicer, and the servicer takes the position that it has “first dibbs” on the money as it is to be applied to the disputed mortgage debt.

There are specific statutes which deal with this situation, but the servicers assume that homeowners are unfamiliar with them and simply demand that the homeowner endorse an insurance check over to the servicer even though, in a contested foreclosure, the servicer has actual knowledge that the alleged “mortgage loan debt” is disputed. In view of the level and extent of devastation from the hurricanes, this is probably going to add significant additional litigation to the already overburdened court systems.

Many years ago, there was a short animated tape called “Insurance Adjuster’s School”. It showed a one room “schoolhouse”, with men in jeans and t-shirts entering the building and exiting in a white shirt, tie,and dark pants with a “Diploma” in hand. All throughout this in-and-out process was the chant: “WHAT DO WE DO? WE SAY NO! WHAT DO WE DO? DENY THE CLAIM!”, over and over again.

There was also someone who formed an insurance company many years ago who instructed his entire staff to deny every single claim that was submitted, and fight every claim as long as possible, as insurance companies are in the business of making money, not to pay claims.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com