January Feature Article

Featured Coverage: Mortgage Payment Protection

January Feature Article

We are proud to offer a Mortgage Payment Protection that can be added to your client’s policy for an additional charge of $20, which is the annual premium for this endorsement. This coverage option provides eligible customers with up to $1,500 a month for up to 12 months, beginning 45 days after a covered occurrence renders the dwelling uninhabitable. Coverage is only available for primary residences when there is a mortgage present on the property.

Payment is limited to a maximum of $1,500 per month, with up to a maximum benefit of $18,000 or twelve months. Payment will be equal to the principal and interest of the monthly payment due from the insured for a promissory note on the covered dwelling, executed by the insured and secured by a first deed of trust or mortgage. This means that payment is made as part of the overall claim. So, after a qualifying loss, the insured has to submit proof of the mortgage payment amount and they will be reimbursed for this as part of the overall claim, on a month-by-month basis.

The $1,500 per month is the maximum benefit; however, if the mortgage payment is less, Pacific Specialty will reimburse the lesser amount. If the mortgage payment exceeds $1,500, we will only pay $1,500. The following items are not covered and not entitled to payment from Pacific Specialty, including, but not limited to: taxes of any type, insurance premiums, delinquency on the insured’s promissory note, trustee funds, late penalties, and/or Homeowners Association Dues.

Mortgage Payment Protection Details (HO-3 and Owner-Occupied HO-6):

For an additional premium, when an insured’s home is damaged and uninhabitable as the direct result of a covered peril, they may be eligible for added coverage for up to twelve months per the conditions listed below:

(1) The home has been uninhabitable after the loss occurrence for 45 days

(2) The home is expected to remain uninhabitable for at least 30 more days

(3) The home was the insured’s principal residence immediately prior to the loss

(4) The home was damaged by a peril insured against

(5) The uninhabitable condition is the direct result of a peril insured against

(6) Construction or repairs have been started and any delays either before or after construction has begun are not the fault of the insured

(7) The insured has not relocated or moved to another permanent residence

(8) Construction or repairs has not yet been completed

If the insured meets all of the conditions listed above and they qualify for payment, they must continue to meet all of the conditions above prior to any future monthly payments. Payment will be made for full months meaning that if the insured is able to move back in to the dwelling in the middle of a month, Pacific Specialty will not pay a prorated amount to cover that last partial month payment.

This coverage option is not available in Connecticut or New Jersey. Please contact your Sales Representative or give us a call at (800) 303-5000 to see if our Mortgage Payment Protection is available to your clients.

*The insurance policy is bound by the insurance company. The insurance policy, not this communication, forms the contract between the insured and the insurance company. The policy may contain limits, exclusions, and limitations that are not detailed in this communication. Coverages may differ by state.