My concern is about NHT's Group Mortgage Premium Insurance (GMPI). Since the mortgagor is paying for insurance, isn't he/she entitled to examine the comprehensive insurance policy instead of a summary? The policy will detail the little things that will make a big difference should there be a claim. What are the terms concerning the recovery of a loan under GMPI? If insured for, say, $1 million, and the mortgagor dies when the loan has a balance of $300,000, what happens to the $700,000? Does it go up in smoke or can the mortgagor's beneficiary claim it? Can you find out from NHT how one can get a copy of the Comprehensive Insurance Policy?
- Concerned mortgagor
INSURANCE HELPLINE: A NHT mortgagor sent me a link to a document described as a policy summary of the agency's Blanket Houseowners Comprehensive Insurance after reading my June 18 column, 'When little things pile up ...'.
The insured on the document is named as "National Housing Trust (NHT) and their Individual mortgagors for their respective rights and interests". American Home Assurance Company was identified as the insurer. The period of insurance was April 1, 2010 to April 1, 2011.
Several things in the summary caught my attention.
The coverage will not be triggered by the death of the mortgagor, but rather by the occurrence of an insured event like fire, or hurricane damage to a building. Presumably, there is a contract that covers the lives of the mortgagors.
The period of insurance for the perils insurance ended seven years ago.
American Home, while listed by the Financial Services Commission's website as a general insurance company under the Insurance Act 2001 is, according to my information, no longer trading.
It is not clear who created the policy summary.
The contents of the three-page document appear to have been prepared on the premise that readers would have access to the insurance contract and can verify that the summary is an accurate representation of what appears in the policy.
There is nothing in the summary that explains what the policy says about making claims or how claims will be settled.
No serious attempt appears to have been made to properly communicate the terms of the insurance specifically to an NHT audience, which, it is safe to assume, consists mainly of persons who are unfamiliar with insurance.
And the words that are used in the summary would displease Gleaner columnist and literary scholar Carolyn Cooper, not to mention the late cultural icon Louise Bennett.
I sent a copy of the mortgagor's email to the NHT's wecare@nht.gov.jm [2] address on June 19. The response from customer care officer Nakeira Roache was immediate. She assured me that my enquiry had been passed on to the appropriate parties for handling.
Other members of the NHT team have let down Nakeira. After nearly two months and my threat last week to discuss the subject without an NHT response, the agency's communi-cation department wrote to me as follows:
Response 1: "A copy of the insurance policy document can be made available to the mortgagor upon his/her request."
Response 2: "NHT purchases peril and life insurance for mortgagors. The life insurance covers the life of mortgagor for the balance of his/her NHT loan. The coverage decreases as the loan balance decreases and the premium is adjusted annually. The life of a mortgagor with a loan balance of $300,000 would be insured for that amount and his/her premium would reflect this. In the event of the death of the mortgagor, the outstanding loan would be liquidated and there would be no balance accruing to his/her estate."
The responses are technically accurate. However, the folks in NHT's communication department - like Police Commissioner George Quallo or the current US President - have not read or understood Malcolm Gladwell's critically claimed book (not novel as I once incorrectly stated), The Tipping Point. Apparently, they do not subscribe to the idea, as Gladwell so eloquently stated, and a point on which most professionals would agree, that "little things can make a big difference".
For an organisation that says publicly that 'We Care', NHT's corporate communications department offered no apology for the long delay in responding to my request. It addressed none of the issues that I raised about the summary of the contract that is posted on its website, things any reasonable person would ask.
The information that it has offered about the decreasing term life insurance contract that is arranged on the lives of mortgagors is substantially less than what has been made publicly available in respect of the mortgaged property. Shouldn't mortgagors have a right to examine that contract, too?
Nice-sounding slogans like 'We Care' are easy to say. Big differences will only occur when many little things are done right. To paraphrase the Gospel of St Matthew, it is by the "fruits" of little things done right, that "you will know them".
- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to aegis@flowja.com [3].