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Tuesday, February 26, 2013

West Virginia State Senator Introduces Bill Requiring Lenders to Advance Funds, not Force Place

Earlier this month, West Virginia State Senator Gregory Tucker (D-11) introduced a bill, S. 84, that requires a lender to advance premium, not force-place, if a voluntary policy is being cancelled for non-payment.

The Bill states (emphasis added):
Notwithstanding any provision in this section to the contrary, if a lack of insurance upon collateral in which a lender has a security interest and is a named additional insured on such insurance policy is or will result in a lapse of an existing policy for nonpayment of renewal premium, such lender shall not cause forced placed insurance to be added to protect the lender's security interest but in such event lender shall advance such sums as are necessary to prevent a lapse in such existing policy and all sums advanced shall be deemed as additional principal subject to the terms of the promissory note or other instrument creating the obligation and secured by lender's lien document.

Learn more about West Virginia State Senate Bill S. 84.