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My mother purchased a home, closing last January. Took out a mortgage with T&I taken via escrow. This includes homeowner's + property taxes + flood ins (mandatory for area).
First year went off w/o a hitch and coming up on entering the second year of the mortgage she gets a letter from the flood insurance company, notice of cancellation, grace until end of January.
Please read this very carefully.
Nationwide directly provides the homeowners' policy but wholesales (brokers? what's the word...) another company for flood ins.
So the search began! So far we have discovered:
Spoke to lender, F&M bank, who tracked down the check they cut to Nationwide for the flood insurance. It was cut, sent, and they verified the check was actually cashed by Nationwide. Local office, local agent. Bank manager said it was very odd the local Nationwide branch made a specific request for F&M to cut a check for the flood insurance to the local Nationwide branch, instead of paying the flood ins company directly. That is not a common request.
Went to local Nationwide branch (this is her assigned agent) and they confirmed both homeowners and flood ins payments were received by Nationwide. They researched their check for the flood ins and discovered a mistake in which they sent it to the wrong address - NATIONWIDE AGENT CLAIMS it was sent to an address designated for direct pay customers and not escrow customers. I don't see how this should matter.
Lastly, she placed a phone call to the flood ins company itself, who confirmed the year's payment has not been received. She asked about the direct pay vs escrow address, and the phone rep stated it should not matter which address it was sent to, the payment would be processed.
As a final followup she went back to the local Nationwide office and informed them of what the flood insurance company explained regarding the address. Nationwide office states they will cut a check to the correct address as indicated for escrow payments.
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That was a mouthful. What type of foul play could be going on here? My mother at this point is beyond livid and incredibly suspicious as to fraud that could take place inside a branch office that deals with paper checks.
Of course, I'm more interested in what recourse we have and who ELSE we need to speak to (who polices the Nationwide agents themselves?) in order to confirm this actually gets done? The only way we know to verify payment is to call the flood ins company to check - but how long should she give the check to arrive?
My dad once told me: The three biggest lies in the world are: 1.) Check's in the mail, 2.) it's only a cold sore, and 3.) Nothing, officer.
I can understand your mother being livid at the SNAFU. I would be too, and have been, many years ago when I had to deal with mortgage companies and insurance mistakes.
Trouble is, there is no recourse. Nobody's getting tarred and feathered for this. Insurance departments regulate insurance companies but insurance departments don't care about this sort of thing.
There's a grace period until the end of January. That's almost 3 weeks. Plenty of time to get the premium paid. And, yes, the best way to verify payment is to call the flood insurance company. While she is at it, she should find out if she can pay the premium online by credit card if it gets too close to the end of the month.
I've had many occasions to pay a year's worth of insurance on my own when my lender f---ked up and then hassled with the lender to get the money back and an adjustment to the escrow account.
I can understand your mother being livid at the SNAFU. I would be too, and have been, many years ago when I had to deal with mortgage companies and insurance mistakes.
Trouble is, there is no recourse. Nobody's getting tarred and feathered for this. Insurance departments regulate insurance companies but insurance departments don't care about this sort of thing.
There's a grace period until the end of January. That's almost 3 weeks. Plenty of time to get the premium paid. And, yes, the best way to verify payment is to call the flood insurance company. While she is at it, she should find out if she can pay the premium online by credit card if it gets too close to the end of the month.
I've had many occasions to pay a year's worth of insurance on my own when my lender f---ked up and then hassled with the lender to get the money back and an adjustment to the escrow account.
It should NEVER get to that point. Ever. We have discussed this possibility and she said one thing that will NOT happen is she will NOT be paying the insurance company (twice, considering she's paid into escrow) out of her own pocket. I think what may happen sooner is she winds up back in the agent's office standing on his desk until she is cut a check with which to pay the flood ins.
I will manage her through this and update as I find out more. I'm sure a few are waiting to see how this turns out.
she said one thing that will NOT happen is she will NOT be paying the insurance company (twice, considering she's paid into escrow) out of her own pocket.
Will she allow the policy to lapse?
That could be dangerous for two reasons.
1 - A flood with no coverage could cost her tens of thousands.
2 - The mortgage company will put its own coverage and charge her multiples of what her premium is now.
If it comes to the 11th hour and this is not resolved, she may have to rethink her position out of self preservation.
I'm really surprised that your mother was able at all to escrow her flood insurance. I had flood insurance through nationwide for 12 years at my old house and it was always a separate policy from my regular homeowners policy that was escrowed. I have the same arrangement as well with my new home.
If I’m following this correctly, F&M bank sent check/checks to Nationwide which they acknowledge they received and Nationwide in turn then wrote a check to Flood Insurance Co. So has the check from Nationwide to Flood Insurance been cashed? Can the Nationwide agent tell you at least the check number and date sent?
Two possibilities come to mind: check goes to “wrong” address and it’s floating around (forgive the unintentional pun) somewhere at the flood insurance co while they try to figure out where to apply it.
Or...the local Nationwide agent is caught up in some sort of premium kiting scheme where they don’t send (or at least delay sending) premium checks (usually it would be to the ins. Co. Main office but in this case it’s the flood insurance company) to cover some financial problems the local agent is having. This happens more often than you think, and might explain the “unusual” request the local agent made to have the escrow payments sent to him.
I’d contact the Nationwide corporate office. And as suggested above, monitor the situation and make sure payment is made on time, even if you have to pay premium yourself. You can fight Nationwide for a refund later.
If I’m following this correctly, F&M bank sent check/checks to Nationwide which they acknowledge they received and Nationwide in turn then wrote a check to Flood Insurance Co. So has the check from Nationwide to Flood Insurance been cashed? Can the Nationwide agent tell you at least the check number and date sent?
Two possibilities come to mind: check goes to “wrong” address and it’s floating around (forgive the unintentional pun) somewhere at the flood insurance co while they try to figure out where to apply it.
Or...the local Nationwide agent is caught up in some sort of premium kiting scheme where they don’t send (or at least delay sending) premium checks (usually it would be to the ins. Co. Main office but in this case it’s the flood insurance company) to cover some financial problems the local agent is having. This happens more often than you think, and might explain the “unusual” request the local agent made to have the escrow payments sent to him.
I’d contact the Nationwide corporate office. And as suggested above, monitor the situation and make sure payment is made on time, even if you have to pay premium yourself. You can fight Nationwide for a refund later.
F&M confirmed Nationwide cashed F&M's check forwarding the premium. Nationwide has confirmed they sent their check (at first, to the wrong address, hence the cancellation notice) but CANNOT (perhaps will not ) verify if their check to flood ins has been cashed. Flood ins simply states they've received nothing for this next year.
As you have stated in the possibilities above, the lazy paying agent was a concern of mine, the most plausible possibility after the phone call hearing about all this. My mother speculated that it was conveniently at Christmas time and her annual premium (a sizable amount, $2000+) was an attractive pick to pocket or delay. This is a small town with more people bargain hunting for The General than looking for a good relationship with a local agent. So I imagine business is tight.
Agency was assumed by a new guy after the former agent retired after 30-some-odd years. Not sure if she sold the agency to him or Nationwide just looks for someone else to step up, or how that works. But if he paid anything for that book of business, he's probably underwater in this town.
Hamster wheel turning full speed I'll keep you all posted.
Talk about blowing a simple error so incredibly far out of proportion.
Do you realize how often this happens? It’s incredibly common.
Just follow up with the flood carrier and make sure to update the escrow account with the correct payment address for next year, then save the rest of your pearl clutching and hand wringing for something more worthy of that.
Talk about blowing a simple error so incredibly far out of proportion.
Do you realize how often this happens? It’s incredibly common.
Just follow up with the flood carrier and make sure to update the escrow account with the correct payment address for next year, then save the rest of your pearl clutching and hand wringing for something more worthy of that.
“This happens more often than you think” / “This is nothing new” are responses to de-escalate sometimes very material errors. The “simple error” could result in the insured not receiving coverage they paid for. I have a saying: MY AVAILABLE BALANCE IS NOT YOUR MARGIN FOR ERROR.
I bought a car recently. They asked for my auto insurance information. Instead of assuming, I asked them if I still needed to call it in to add to my policy, or if they would. The salesman informed me that yes I must, but they used to do it until one employee called in the insurance on the wrong VIN and the customer’s new vehicle wasn't covered in an accident.
Now imagine. That person provided their insurance info to the dealer, at a time when they WERE handling this part of the process. And they screwed it up, big time. With so many people in the relay, ONE is bound to be either lazy, incompetent, or a liar. You can take THAT to the bank
I understand the frustration of having to deal with this hassle.
But ya' know, sometimes people just make mistakes, even people who are not lazy, incompetent, liars, or thieves.
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) verify if their check to flood ins has been cashed. Flood ins simply states they've received nothing for this next year. 
I'll keep you all posted.
