What Is Forced Placed Homeowners Insurance? 
The Mortgage Company or lender have certain rights if you fail to do what you have promised to do in your contract -LRB- mortgage or loan agreement . -RRB- Placing coverage is a right retained by most lenders . When you apply for a mortgage or loan you promise to insure the home or car and name the mortgagee or lender as a loss payee or additional insured . If you dont do that , they havent any coverage on their collateral and so they will issue a policy . These are frequently short term policies because they are so expensive . This is not a subject you want to find out about through experience . 