Special offer

Is your buyer signing an Insurance Application at Closing?

By
Services for Real Estate Pros with Allstate Insurance

The process for home buyers obtaining insurance is getting "simpler".. Yes, Mortgage brokers make it easy by asking the question: Can we (mortgage broker) arrange the insurance for you?

This seems like a simple enough question and lends "ease" in the mortgage process.  Getting the application correct is the first part to making sure the customer is afforded coverage when a claim occurs.  The application is the foundation to providing and extending coverage.  When the applicant signs the application, time needs to be afforded to ensure the data is correct.   The closing table is the wrong place to present the application and ask for a signature.

When a claim occurs shortly after closing, the entire application could be a point of review.  When a application is presented and signed at closing, the possibility of error exists and that error if not correct PRIOR TO signature could be construed as miss-representation or more strongly defined as "Fraud".  Now that is a strong statement and is a overstatement in many of the applications for insurance.  The key is to disclose information like prior losses.  If the applicant/buyer has several losses that are not disclosed, the application is in jeopardy.

Be careful and look out for your customer.  Have them prepared at closing with the insurance process well behind them.  Accidents happen and seeing a application for insurance at closing is not as strong as walking through the process with a agent well before the event.

NOTE: I work with mortgage companies and mortgage brokers do aide in the process well...  Do not see this post as a anti-mortgage company solution. 

Matt Locke  www.GeorgiaHomeInsurance.com

 

 

Comments (3)

John Barry Seattle Washington Home Loans
Home Loans - Kirkland, WA

Matt,

Good information. you are right..a simple question upfront can make the process go smoother!

john

Jun 11, 2007 01:24 PM
Paul Moye
Benchmark Realty - Franklin, TN
Broker, GRI, SRES

Agree totally. I however have never funded as a Mortgage Broker or Closed as a Real Estate Broker a transaction that did not have a Declaration Page in hand the day before closing.?

How does the Insurance Commissioner see this?

Jun 11, 2007 01:25 PM
Matt Locke
Allstate Insurance - Alpharetta, GA

The Dec page is a result of an application... Signed or not.  The Dec page makes the mortgage broker "happy" and does not require a signed application to obtain.  The application may still be presented to the applicant at time of closing along with the miarad of other signatures. 

Insurance commissioner's view may change from state to state.  My assumption is if the information in the application was wrong or missing key disclosures, that a denial in a claim becomes more viable.   From the perspective of the policy, if the signature is on the application then the statements in the application are the validated by the applicant. 

Matt Locke

Jun 11, 2007 01:41 PM