A number of lenders are facing allegations that they are charging borrowers for unnecessary, duplicative or excessive insurance, as well as backdated policies which provide coverage for time periods which have already passed. While banks are permitted to buy insurance for borrowers whose policies have lapsed, it has been alleged that some lenders are abusing their authority to force placed insurance while receiving kickbacks for these purchases. According to reports, the price of force placed insurance can be up to ten times as costly as insurance the homeowner could have bought himself, and in some cases, puts struggling borrowers at risk for default or foreclosure. If your bank force placed an unnecessary or excessive insurance policy on your property, you may be able to file a claim to seek compensation for damages, including the extreme costs reportedly associated with this coverage. To find out if you qualify, visit
http://www.classaction.org/forced-placed-insurance.html and complete the form on the right hand side of the page for a no cost evaluation of your claim.
The complaints lodged by consumers who were forced to pay for the high costs of lender placed insurance are numerous and span several types of coverage, including homeowners’, property, flood, wind, hurricane and hazard insurance. One property owner in Florida claimed that when an insurer’s error caused the insurance coverage on her home to lapse, her bank force placed a new policy, which duplicated flood and wind coverage that had remained in place. The force placed coverage also reportedly provided
retroactive hurricane protection for a year when no significant storms were recorded. According to one letter from the consumer’s servicer, the backdated coverage was appropriate as it would have allowed the borrower to benefit significantly had there been damage to the property during the uninsured period.
Consumer complaints regarding force placed insurance are not just limited to concerns over retroactive or backdated policies. In some cases, banks are reportedly force placing coverage which exceeds the mortgage’s face value and the overall worth of the property. For instance, one couple claims that they carried $194,000 in flood insurance to cover a $161,000 bank loan, but were still forced by their lender to obtain more coverage which they believe to be costly and unnecessary. In regard to force placed flood insurance, some lenders are also forcing or coercing their borrowers into paying for a second insurance policy, even if they are covered through a condominium association or otherwise. It is believed that banks are also engaging in unfair business practices when they allow their borrower’s existing coverage to lapse without providing proper notice that they would then purchase insurance on their behalf.
In light of these mounting complaints, the attorneys working with ClassAction.org are investigating claims surrounding potentially unfair force placed insurance practices. To assist in their investigation, they would like to hear from any borrower who believes they were treated unfairly in regard to lender placed insurance. To voice your complaints, please visit
http://www.classaction.org/forced-placed-insurance.html and complete the free form on the right.
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