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I'm purchasing a home in Nassau County and obviously need to get homeowner's insurance. Since LI seems to have been blacklisted by most of the major insurance companies, who refuse to issue new policies since it is a "coastal area" what companies do people recommend? Also, a bonus if the company doesn't discriminate against German Shepherds.
Since LI seems to have been blacklisted by most of the major insurance companies, who refuse to issue new policies since it is a "coastal area" what companies do people recommend?
Can you give more information about this? We just had our home mortgage loan application rejected by the PMI people, and so lost the loan. They gave a really confusing explanation, that the appraisal did not have acceptable comparisons...What's going on?
The appraisal and the insurance would be two different things. If PMI was involved you were likely putting down less than 20% which can create more hurdles to go through. If the appraisal did not have acceptable comparisons it is likely that the bank (appraiser) couldn't find recent (last 3 months) sales of the same type of house (colonial, ranch, etc) in the neighborhood that would imply your purchase was worth what you were paying. ie, if you were paying $400k but recent sales indicated that the property was more likely worth $350k the bank would require you put more money down to ensure there is some minimal equity in the house. Your real estate broker should be able to explain all of this to you.
The appraisal and the insurance would be two different things. If PMI was involved you were likely putting down less than 20% which can create more hurdles to go through. If the appraisal did not have acceptable comparisons it is likely that the bank (appraiser) couldn't find recent (last 3 months) sales of the same type of house (colonial, ranch, etc) in the neighborhood that would imply your purchase was worth what you were paying. ie, if you were paying $400k but recent sales indicated that the property was more likely worth $350k the bank would require you put more money down to ensure there is some minimal equity in the house. Your real estate broker should be able to explain all of this to you.
This is exactly what was explained to us by the bank. (Are you with HSBC? j/k) The RE agent said he's never heard of a loan being rejected by PMI. Don't want to get off-topic b/c I am interested in knowing more about this insurance issue on LI, but do you think asking for a lower price on the house would help? The bank won't tell us anything. And you're right, we did put down less than 20%. First time homebuyers, and about to give up...
Last edited by ambralita; 06-09-2009 at 12:50 PM..
I'm certainly no pro in this arena but did enough research and asked enough questions. I'd recommend getting a better real estate agent going forward, but you likely have 2 options: 1) put down more money - I assume you can't afford to or don't want to do this or 2) re-negotiate the price with the seller as they may now have a similar problem if they encounter another buyer wishing to put down less than 20% or a buyer that won't buy for more than the house's appraisal value.
Re the insurance - allstate, state farm, nationwide won't write new policies on LI because their liabilities in LI and NYC have to be capped at some amount. Therefore people seeking new policies have to go to smaller companies or have the policy brokered through one of the big boys. I just got a quote back through nationwide's partners that was absolutely absurd. I'm wondering if anyone has a suggestion.
I'm certainly no pro in this arena but did enough research and asked enough questions. I'd recommend getting a better real estate agent going forward, but you likely have 2 options: 1) put down more money - I assume you can't afford to or don't want to do this or 2) re-negotiate the price with the seller as they may now have a similar problem if they encounter another buyer wishing to put down less than 20% or a buyer that won't buy for more than the house's appraisal value.
Re the insurance - allstate, state farm, nationwide won't write new policies on LI because their liabilities in LI and NYC have to be capped at some amount. Therefore people seeking new policies have to go to smaller companies or have the policy brokered through one of the big boys. I just got a quote back through nationwide's partners that was absolutely absurd. I'm wondering if anyone has a suggestion.
Agreed - get a new real estate agent. Any real estate agent who doesn't understand what it means when a house doesn't appraise enough needs to be reconsider their choice of profession.
In any event, as stated earlier, Mortage Insurance and Home owners Insurance are two different things. PMI is required for any loan with less than 20% equity and basically protects the bank. Home owners insurance is what protects the home owner in case of damage/theft/etc to the property and structure.
One other point I should make - State Farm, in fact, still writes new policies on Long Island. I switched to them last July.
We have our policy with Travelers---and can't complain---if you want specific name of our agent and phone number just send me a private message and I will be happy to provide you with the info.
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