Disaster Recovery Plan? Any comment? (insurance, premium, fees, bank)

[LingLing]

I received a letter from my mortgage company, WellsFargo, offering Diaster Recovery Plan. For $56.14 per month, if a disaster stikes my home and I cannot live in my home for at least 48 hours, it would pay my mortgage for 24 months. If the house can't be rebuilt, it would pay off my mortgage up to $250,000. It sounds nice and afforable. Since I live in Florida, I think it is a good idea to have it. Any experience or comment? Thank you in advance!

[maf763]

See how much it overlaps with your homeowners insurance before you sign up. And I don't get the 48 hours reference - it sounds like you're saying that if you are evacuated for 48 hours they'll pay your mortgage for 2 years - that sounds dubious.

[LingLing]

Originally Posted by maf763

And I don't get the 48 hours reference - it sounds like you're saying that if you are evacuated for 48 hours they'll pay your mortgage for 2 years - that sounds dubious.

I am sorry to confuse you. They'll pay the mortgage up to 2 years during the rebuilding. Home owner insurance usually only pays to rebuild and won't pay for the mortgage. During a recent visit to New Orleans, I was told that home owners still have to pay mortgage while the house is being rebuilt.

[texdav]

Most insurance will also pay your living expenses to include food for upto 10% of the policy amonut if your home is not habitable.Of course you have to pay the mortgage;afterall you do own the home.

[DasNootz]

Of course you have to continue to pay the mortgage... If you choose not to rebuild the lender gets paid first, and you'd get any left overs. I don't know how much your home is worth (aside from site value), but nearly $700/year would almost double my annual insurance premium.

It wouldn't be worth it to me... living in New York State. Maybe I'd give it a second thought if I lived on the coast or along the Gulf... or in an area that typical home owners insurance might not like to insure.

[soscity44]

I received A disaster recovery plan insuracne flyer from my mortgager Bank of America. The premium listed is $11.87 a month which they say covers: "Fire, Flood, Earthquake, hurrican, mudslide, wind storm, electrical fire, tornado, ice storm, gas explosion and more". They further go one to say that every mortgage payment, up to 24 months, will be paid by them. They will pay the mortgage balance up to $250,000 if permanently uninhabitable. Does this plan sound like supplemental mortgage insurance? We have our house insurance through another insurance carrier and the premiums between the two are very far apart.

[HappyTexan]

Sounds fishy to me. If you have homeowner's insurance then I'd toss it in the trash.
Banks are looking for additional fees these days.

[sean98125]

Talk to your insurance agent to see how this would fit with your current coverage. If it specifically covers Acts of God that your homeowners insurance doesn't cover, then your agent will let you know. He or she will also let you know if that coverage is available through your current insurer and how much it would cost.

[juadedlady]

Per Suzie Orman, you need the "GAP INSURANCE" to supplement your mortgage insurance, incase of a disaster. A disaster can wipe out your savings very quickly. For the little money they ask for, I think it is a very good idea and an easing of the mind. Especially if you have a child like mine, who is autistic. He is developementally challenged and it is like having an ADHD child that never grows out of the two's stage. He gets into everything and it scares me to death that he will set the house on fire or something. To me it is a good idea to carry GAP INSURANCE.

[brokerdave]

those additional coverage insurances are more of a scam than anything. you think reg insurance is bad, wait till you try to deal with them.

dont do it. its a waste of money