What is Force-Placed Insurance? Why do I have Force-Placed Insurance? How can I recover my premiums for Force-Placed Insurance? This article will attempt to answer your questions about force-placed insurance and how you can file a claim or join in the force-placed insurance class action lawsuit.
What is Force-Placed Insurance?
What is Force-Placed Insurance?
Force-Placed Insurance is a practice of big banks, large lenders, and loan servicers, these institutions force a borrower to maintain homeowners/hazard insurance, flood insurance, and/or wind insurance on his or her residence. Most mortgages require the borrower to maintain homeowners insurance, flood insurance, or wind insurance on his or her residence. If the borrower falls upon hard times and fails to do so, the bank, lender, or loan servicer, will “force place” an insurance policy to allegedly “protect their interest.” The premiums for these force-placed insurance policies typically cost 10 times the amount of normal insurance policy. The banks claim these excessive premiums are the responsibility of the borrower and typically tack them onto the borrower’s loan. This is true for force-placed hazard insurance, force-placed flood insurance, and force-placed wind insurance.
Why Do You Have Force-Placed Insurance?
If a borrower is in default, or near default, a bank, lender, or loan servicer, will typically force-place insurance on the borrower’s residence if the borrower allows his or her homeowner’s insurance, wind insurance policy, or flood insurance policy to lapse. In some instances, if a bank, lender or loan servicer feels that a borrower’s flood insurance coverage is not high enough, they will put their own force-placed flood insurance policy in place to cover the claimed lack of coverage. In other instances, banks, lenders and loan servicers, have force-placed insurance on borrowers’ residences prior to the expiration of their existing homeowner’s insurance policy. Many consumers have also reported these force-placed insurance policies being placed against them retroactively, which may be a violation of state consumer protection laws and/or federal consumer protection laws.
How can I recover the premiums charged to me through Force-Placed Insurance
If your think your bank, lender, or loan servicer has charged you excessive premiums for force-placed insurance, you may be able to recover for the excessive premiums that have been charged to you. Please contact our Consumer Protection Attorneys toll free at (888) 252-0048 to discuss the details of your force-placed insurance situation and your rights to recovery. At least 31 banks are currently being investigated as to the practice of force-placed insurance. Some of these banks include the following:
- JPMorgan Chase
- Bank of America
- PHH Mortgage
- Wells Fargo
- CitiMortgage, Citigroup, CitiBank
- Ally / GMAC
- U.S. Bank
Many other banks may be engaging in this allegedly deceptive practice of force-placing insurance policies with excessive insurance premiums against borrowers. You may also click the link below to receive a free consultation online with a consumer protection attorney: