Controversy over women denied home insurance because of foster children

A Montreal mother says she is shocked and outraged that after insuring her home with Wawanesa Insurance for 10 years, the company will cancel her coverage because she has more than two foster children.

“I was floored. I couldn’t believe that a company could actually cancel your policy because you have foster children.”

The woman, whom CBC News has agreed not to name in order to protect the identity of her five foster children, received a letter from Wawanesa informing her that her home insurance will be terminated next month.

“Due to the risk of aggravating circumstances, we find ourselves under the obligation to cancel your house insurance to respect our underwriting norms,” the letter from Wawanesa read.

The letter came after the family got a call from the company to update her file.

“They asked, ‘Do you have anybody in the house living with you who is not part of your immediate family?’ So I said I have foster children … and this is what I get for it,” she said.

The woman said she has been taking in foster children for years, and in the 10 years she’s been a client with Wawanesa she was never aware of its policy.

Underwriting rules ‘clear’

A representative from Wawanesa would not comment on this specific case, but told CBC News its rules are clear.

“Wawanesa Insurance, like every other insurance [company], we all have underwriting rules. These rules determine what we insure and what we don’t. Our underwriting rule for households which house foster children is that we insure homes with two or less foster children,” said Thierry Gamelin, marketing manager at Wawanesa.

The family, which must now find another company to insure their home by July 11, calls it discriminatory.

“We’ve never, ever put a claim in to Wawanesa at all. This is the first time I’ve heard of any discrimination for foster kids. There are families out there that are trying to help other children have a stable life and not be labelled, and here the insurance company is labelling us for having foster children, and cancelling our insurance for it,” she said.

The Quebec Federation of Foster Families, which places foster children with families, said it has heard of this situation occurring before, but not often.

“The insurance companies can set the rules they want. If they assume more than two [foster children] are riskier, it is their choice,” said the federation’s vice-president Robert Pagé.

The Insurance Board of Canada told CBC News that it can help families find the insurance coverage that is right for them.

Source: CBC News

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Title insurance protects the equity in your home

Insuring the ownership of your property, referred to as title insurance, is just as important as insuring your property and its contents from physical loss or damage.

Moving.away_.from_.home_

Incidents of real estate title fraud are increasing in Canada and homeowners and lenders are proving to be irresistible targets for fraud artists.

But homeowners and lenders can protect themselves by obtaining a title insurance policy.

Legal ownership in property is evidenced by the title to the property being placed into your name. The government land registration records will reflect you as the owner and anyone searching those records will also recognize you as the owner.

You should protect that ownership and therefore, protect one of your most prized assets—your home.

In a typical example of a real estate title fraud, the fraud artist obtains title to a property via a fraudulent transfer document or deed.

He or she goes to a bank and obtains the mortgage funds. The mortgage is then registered against the property.

When no mortgage payments are subsequently made, the lender will serve notice that it intends to sell the property, and the scheme is revealed to the legitimate owner when they receive the notice that the lender is trying to sell their property.

Thieves often target properties that are mortgage free and where owners have a good credit rating. This allows them to apply for a significant mortgage.

Generally, the losses to homeowners can be catastrophic with the homeowners paying thousands of dollars in legal fees to defend their title and lenders often losing the full amount of their mortgage.

Although it’s difficult to pinpoint an exact number, one association suggests that mortgage fraud amounts to $1.5 billion a year across Canada.

Most lending institutions now require title insurance upon registration of your mortgage with the lawyer/notary for either purchasing or refinancing your home.

This requirement is to protect only the lender in the event of real estate fraud. It would be prudent to have a separate policy to protect yourself in the case of any of the above fraudulent acts.

Should you already have a mortgage in place on your home, and not have title insurance to protect yourself, it’s not too late to do so.

All you have to do is contact your lawyer or notary public for assistance and to understand the benefits of title insurance.

The cost is actually inexpensive relative to protecting one of your most valued assets. After all, you insure your life to protect your family so why not insure your home to protect you from losing your financially precious equity

By Trish Balaberde, Darwyn Sloat, Kristin Rosdal  - Kelowna Capital News

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Insured against floods? Think again

Flooding worries are on many minds following the dramatic events in Sherbrooke, Quebec last week and as rain starts to fall in Alberta this spring. But homeowners looking to insulate themselves from flood damage can’t look to Canadian insurance companies for help.

flood

According to the Insurance Board of Canada, 61 per cent of Canadians think their home insurance covers them in case of overland flooding.

Sixty one per cent of Canadians are wrong

The IBC’s Pierre Babinksy says insurers in Canada don’t offer protection against flooding because they think floods, unlike fires, earthquakes or hurricanes, are what he calls “certainties.”

“It’s very difficult to assess the risk in order to quantify it and in order to capitalize accordingly cover any damages that would be incurred,” he says.

However, flooded homeowners can usually seek assistance from their municipalities, which are in charge of distributing federal and provincial flood aid.

Babinsky does encourage homeowners to contact their insurers in all cases of water damage in order to see if they are eligible for reimbursement.

Source: CJAD News

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Chase To Pay Out $300 Million Over Home Insurance Allegations

jp-morgan-chase

On Friday, a federal judge signed off on a settlement that will have JPMorgan Chase paying out at least $300 million to around 750,000 mortgage borrowers. It’s the first of what could be several large settlements with major lenders over the issue of forced-place insurance.

When you have a mortgage but your insurance lapses, your mortgage servicer will go out and get insurance for you. This forced-place insurance generally comes at a much higher rate and with less coverage than what a homeowner would get on her own.

The class-action lawsuit had alleged that the high rates on forced-place policies purchased by Chase weren’t just a matter of the insurance company, Assurant, charging more, but also of the bank receiving kickbacks and commissions. Thus, the plaintiffs claimed that Chase had a financial stake in seeing that homeowners were charged a higher premium.

According to the settlement, Chase can not earn commissions on forced-place insurance for six years. The bank says that it “stopped accepting commissions several years ago.”

Payments to affected mortgage borrowers will be equivalent to 12.5% of the net premium.

Similar lawsuits are pending against Citigroup, Wells Fargo, Bank of America and HSBC.

Assurant has already settled a class-action for $14 million. Neither it nor Chase has admitted any wrongdoing.

Fees on forced-place insurance has come under fire in recent years, with some advocates and regulators concerned that charging homeowners a premium on something they are having trouble affording at a lower price is just pushing some further toward foreclosure.

The Federal Housing Finance Agency is reportedly considering a rule change that would prohibit lenders who earn commissions and fees from forced-place insurance from doing business with mortgage-backers Fannie Mae and Freddie Mac.

Source: Consumerist

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Flood Re home insurance: your questions answered

In the summer of 2013 the government and insurance industry came to an agreement about flood-prone homes, to allow owners of such homes to be able to buy affordable insurance. Under a scheme called Flood Re, annual premiums will be capped and payouts for flood damage will come from a central pool of money.

New Homeowners Policy Courses Now Available

How do I know if my home is affected?

The scheme covers 350,000 households which the Environment Agency says are at high risk of flooding. You can use its interactive map to find out if your home is one of them.

What does this mean for homeowners on flood plains?

Unless your property is in council tax band H then the flood aspect of your buildings insurance will be capped from 2015. The Association of British Insurance says the cap will be £210 a year for properties in bands A and B, rising to £540 a year in band G. The premiums will go in a central fund and be used to pay out claims to any insurer. In theory, some people could see their costs go down once the cap comes.

It is important to remember that the cap is only on the flood element of your insurance – if other risk factors change, your premiums could be pushed up by them.

Insurers will also pay a levy into the fund equivalent to £10.50 a year on every home insurance policy.

Does this mean my premiums will go up?

If you are on a flood plain it could, although you have probably already seen premiums rise to reflect the risk. If you are not on a flood plain insurers say the cost of the levy won’t be added to policies as homeowners are already paying some of their premium to subsidise other customers at greater risk of flooding. However, the cost of this year’s flooding could mean higher premiums for everyone as insurers attempt to cover their bills.

What happens to band H council tax payers?

They are not covered by the Flood Re scheme so could see premiums rise by a sum above the cap or find that their homes become uninsurable. This could have a knock-on affect on the value of their homes, as mortgage lenders will only offer loans on properties which have buildings insurance.

Is anyone else excluded?

Yes, homes built since 2009 are not covered – the ABI says this is designed “to avoid incentivising unwise building in flood risk areas”. Neither are those owned by buy-to-let landlords or holiday lets. Leasehold properties are also excluded. The British Property Federation says there are 840,000 leasehold properties estimated to be at risk of flooding, 70,000 of which are deemed to be at high risk.

What does this mean for tenants?

Tenants should still be able to buy contents insurance for rented homes, but if their landlord is unable to get affordable insurance cover they could face problems if their property is ever flooded. Landlord insurance policies offer help towards rehousing costs, which the landlord might not otherwise be able to meet. The Residential Landlords Association says some of its members may decide to pull out of the sector as result.

Will the excess on my policy be affected?

The excess, which is the amount you have to pay towards the cost of any claim, could be kept down by the scheme. Some householders have reported being forced into taking on large excesses since being flooded. Flood Re should mean that insurers are happier to take on the risk of these properties and won’t insist on large excesses when they do.

Will I have to stay with the same insurer?

No. The current agreement between the government and the industry ties insurers into covering existing customers but does not oblige them to cover anyone else, meaning anyone buying an affected property could struggle, as could those who want to shop around. Flood Re is designed to make it less risky for insurers to take on these customers so should mean people can move around.

Excerpted article by Hilary Osborne, The Guardian

Canada: A series of 5 new Homeowners Insurance Policy courses designed for insurance agents and adjusters has been launched by ILS. These online insurance training courses, each good for one continuing education credit hour, are accredited in BC, Alberta, Manitoba, and Saskatchewan.

Some tips on how to protect against frozen pipes

It’s a telltale sign: you turn on the faucet and … nothing.

With record cold in much of the nation this winter, many homeowners have had (or will have) to deal with pipes freezing and then bursting.

Winter storm-related insurance losses “will be more this year due to the extreme cold and the breadth of the territory that is being affected by it,” said Peter Foley, vice-president of claims for the American Insurance Association. Those losses, which include damage from frozen pipes, total about $1.4 billion a year on average, according to the Insurance Information Institute.

People unaccustomed to extreme, prolonged cold, especially those in the South, are particularly vulnerable, said Robert Hartwig, the institute’s president.

“There’s a lack of awareness of the fact that a pipe could freeze and what to do about it,” he said. For instance, they may not shut off the water to outside faucets, and their homes may have less insulation.

Damage from a burst pipe can vary greatly, depending on how long the water runs unabated.

Some tips on how to protect against frozen pipes, and what to do if one does freeze:

BEFORE THE FREEZE

Water freezes at 32 degrees Fahrenheit, so keep your thermostat significantly higher than that. “You should never turn it below 55,” Foley said.

You might leave the water dripping a little bit, advised Ken Collier, editor-in-chief of The Family Handyman.

“That just keeps enough water moving in the pipe so it’s less likely to freeze,” he said. “If there is some freezing, there is some give in the system because the faucet is open a little bit.”

Collier also suggested getting warmer, room-temperature air to where the pipes are. That can be as simple as opening the cabinets under the kitchen sink, especially if the sink is on an exterior wall. “In some cases, a fan can help with that,” he said.

Similarly, if pipes run through a crawl space, using a fan to blow in warmer air from the house’s interior might help, he said.

Better insulation is the ultimate fix, Collier said, but getting to the pipes can be tricky because it often means breaking through walls.

WHEN A PIPE FREEZES

Do frozen pipes always burst? “You can get lucky,” Collier said.

“Once it’s frozen, the damage is done,” he said.  “Some kinds of pipes break easier than others when the water inside freezes.”

Copper pipes are said to be more vulnerable.

It may seem obvious, but there are two clear ways to know if a pipe has frozen.

“A sign of a frozen pipe is you have no water,” Foley said.

The other sign: flooding. That can happen when the burst pipe starts to thaw out and the water begins flowing again.

If the break is in an exposed piece of pipe, it may mean a flooded basement floor. If it’s in a piece that’s not exposed, the water could seep through a wall.

It’s critical that homeowners know how to shut off the water to the entire house; that’s “usually the only way to get the water pressure off the frozen place,” Collier said.

Yes, it can be an inconvenience _ you can’t take a shower or wash the dishes. You can only flush the toilets once. But it’s the best way to prevent further damage, he said.

WHAT NEXT?

Call a plumber, unless you have the skills and confidence to do the repair yourself.

A temporary fix might involve cutting away the damaged piece of pipe and replacing it with a rubber hose and clamps until the plumber gets there. The degree of difficulty could depend on how accessible the pipe is.

There also are various tapes and putties that might temporarily close the break.

And call your insurance agent. Homeowners policies generally cover damage related to pipes that freeze and burst.

“The repair of the pipe might be a few hundred dollars,” Hartwig said. “The real issue comes in if the leak damages ceilings, floors, furniture, carpeting, electrical work that might be in the wall.”

The average claim is about $5,000, according to Foley.

By Carole Feldman

THE ASSOCIATED PRESS

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