Do You Have to Continue Paying Mortgage Payments After a Hurricane?

The coastal waters of Florida are no strangers to hurricanes and other tropical storms. Residents here are still trying to recover from Helene and now are trying to prepare for Milton. Even amongst the chaos of battening down or evacuating, one of your biggest concerns may be what will happen to your home. And, if it is damaged or destroyed during the storm, will you still have to pay your mortgage.

Even if your home is fully destroyed during a hurricane, you are still responsible for paying your mortgage. It is similar to an auto accident in which your vehicle becomes too damaged for repairs to be practical. Even though you cannot use your vehicle, you are still responsible for making any payments on it. In this instance your auto insurance policy is there to provide coverage for your vehicle. After a hurricane, your homeowner’s insurance will likely cover the damage.

Homeowner’s Insurance After a Hurricane

If you have a mortgage, you likely also have homeowner’s insurance. Most lenders require borrowers to have homeowner’s insurance because it also protects them in the event that the property becomes damaged or destroyed. Lenders do not want to foreclose on a home if the value of the damage is more than the proceeds they could receive in a foreclosure sale. When determining the amount of coverage you qualify for, the insurance company will review the policy and the stated value of the property and the contents within the home.

If You Do Not Have Homeowners Insurance

While many homeowners have insurance for their property, there are a surprising number of people who do not. While lenders and mortgage companies require borrowers to purchase homeowner’s insurance, there is no law in Florida that requires them to do so. People who do not have insurance for a home are typically those who have inherited a property that was fully paid for, or those who have already paid their mortgage in full. Although these individuals are not required to purchase homeowner’s insurance, it is always recommended that they do so they have some protection after a storm.

Why Would Homeowners Insurance Not Cover Hurricane Damage?

Having a homeowner’s insurance policy in the event of a hurricane or another natural disaster brings relief to many borrowers. Still, even with a policy in place, it may not be enough to fully cover the cost of repairing or rebuilding your home. The most common instances in which insurance is insufficient are as follows:

• Your home is not properly insured: Too many homeowners purchase insurance and do not review their policy periodically to ensure it still provides adequate coverage. For example, if you have made major improvements to the home, it may be worth far more now than when you purchased the property. Always review your policy, particularly if it automatically renews, to ensure it provides the necessary coverage in the event of an emergency.
• Little equity in the home: If you have little or no equity in your home, you may find it very difficult to pay off the mortgage. These situations are most common when someone has refinanced their home or if they have recently purchased the property with a small or no down payment.
• High deductibles: Many people find the cost of homeowner’s insurance to be excessively high, particularly when they are trying to pay a mortgage, taxes, and maintenance for their home. To offset the high cost, people sometimes choose a high deductible knowing it would only be paid in the event of a significant loss. This approach does have consequences. If a hurricane or other disaster does affect your home, the insurer’s payout may not be enough to pay the full balance of your mortgage because of the high deductible.

While the above scenarios may all provide the insurance company with a legitimate reason to deny full coverage, there are times when they may act in bad faith. In these cases, litigation may be necessary.

What is Bad Faith After a Hurricane?

Florida has bad faith insurance laws that are meant to discourage predatory behavior by insurance companies and to compensate homeowners and others who are subject to such practices. Florida law requires all insurers to act in good faith, which is to say, to act in a fair manner when investigating, adjusting, and settling claims. Acting in good faith also requires insurance companies to reasonably try to settle all claims, and to pay coverage promptly and fairly after a claim is submitted.

There are many examples of insurance companies acting in bad faith. Some of the most common of these include:

• Not starting the adjustment process soon after the claim is received,
• Misrepresenting important facts or provisions of the insurance policy,
• Failing to provide valid coverage if the refusal is capricious, arbitrary, or without probable cause,
• Failing to provide a copy of the adjuster’s report in a timely manner, and
• Failing to include profit and overhead for a general contractor.

How a Florida Foreclosure Defense Lawyer Can Help

If your insurance coverage is not enough to pay your mortgage or rebuild your home, you may need legal advice. An attorney can determine if you have a right to more coverage than your insurer is stating, or if the insurance company is acting in bad faith. If you need to file a claim against the insurance company for their practices, the process can become much more complex. A Florida foreclosure defense attorney can guide you through it and help you file the lawsuit and prepare a case that can help you obtain the full coverage you deserve.

Our Foreclosure Defense Attorneys in Fort Lauderdale Can Help

During an emergency such as Hurricane Milton, you will have many concerns. The first priority is to ensure you and your family are safe. Your next step should be exercising your rights and ensuring you receive the fair coverage you need. At Loan Lawyers, our Fort Lauderdale foreclosure defense attorneys can help. We will answer all of your questions, advise you of your rights, and make sure they are upheld. Call us now at 954-523-4357 or contact us online to schedule a meeting with one of our seasoned attorneys.