Home Page Potential Lawsuit Forced-Placed Insurance
Were you looking for Bank of America Faces Fraud Class Action over Flood Insurance or Force-Placed Insurance and Bank lawsuits?
Insurance companies, banks and other financial firms face force-placed insurance lawsuits alleging their force-placed insurance is offered at outrageous rates because of the relationship between banks and insurance companies. Allegations have been made that force-placed home insurance is much more costly than traditional home insurance and could be a conflict of interest for some financial institutions.
According to Bloomberg (05/06/12), banks and mortgage services have agreements with insurance companies to buy policies on behalf of a homeowner whose insurance coverage has lapsed. The ability to provide force-placed insurance allows banks to protect properties that they have the mortgage for in case of disaster. The bank forwards the premium to the insurer, the insurer pays a commission to the bank and the homeowner is billed for the premium and commissions.
Forced-Place Insurance Complaint
Critics say that once the financial firms realized there was profit to be made in force-placed insurance, reportedly to the tune of $5.5 billion in 2010, financial institutions formed their own specialty insurance companies, so they could offer force-placed insurance on properties without insurance coverage.
Furthermore, some critics argue that force-placed policies have less protection than cheaper policies and the policies usually protect the lender, not the homeowner.
Force-placed insurance lawsuits have reportedly been filed against insurers and banks for force-placed insurance. A lawsuit against Wells Fargo and QBE was recently granted class-action status by a judge in Florida who alleged the two companies "colluded in a scheme to artificially inflate the premiums charged to homeowners" (as quoted in Business Insider; 02/27/12).
Force-Place Insurance Lawsuits
Plaintiffs claim consumers are charged excessive and unreasonable premiums for their force-placed insurance. They argue that force-placed insurance can cost up to 10 times more than traditional homeowners insurance, often with inferior coverage. Meanwhile because banks have set up their own specialty insurance affiliate companies, there are concerns that the financial institutions are involved in a conflict of interest. Finally, there are allegations that unrelated companies may have offered kickbacks for forced-place insurance policies, offering the banks an incentive to pass customers along to force-placed insurance providers.
According to reports, up to 31 financial institutions have been subpoenaed by the New York State Department of Financial Services for an investigation into the overlap between banking and insurance. Meanwhile, more force-placed insurance lawsuits may be filed against insurance companies and banks for unreasonably high force-placed insurance premiums.
Force-Placed Insurance Legal HelpIf you or a loved one has suffered damages in this case, please click the link below and your complaint will be sent to a Force-Placed Insurance lawyer who may evaluate your claim at no cost or obligation.
Last updated on May-15-12
FORCE-PLACE INSURANCE LEGAL ARTICLES AND INTERVIEWS
HSBC, Assurant Agree to Settle Force-Placed Insurance Class Action for $1.8 Million
Colorado Springs, CO: A well-known national bank that is alleged to have accepted kickbacks from an insurance provider when placing lender insurance on uninsured or under-insured properties, agreed last week to pay $1.8 million to settle a Force-placed insurance lawsuit [READ MORE]
Forced-Place Insurance Continues to Trigger Lawsuits
Sacramento, CA: The parade of Lender insurance lawsuits continues unabated in spite of legislators in various states attempting to put checks and balances in place aimed at preventing allegedly unnecessary and unjust placement of expensive lender insurance products. One of the more recent class actions accuses US Bank NA of systematically abusing its right to force-place insurance on mortgaged property [READ MORE]
Force-Placed Insurance Lawsuits Forcing Industry to Rethink Practices
New York, NY: As some force-placed insurance lawsuits move closer to resolution, more companies are announcing that they are stopping force-placed insurance practices. Meanwhile, federal regulators have also considered implementing new rulings to curb unethical practices used by some companies in the industry [READ MORE]
MORE FORCE-PLACE INSURANCE LEGAL NEWS
FORCE-PLACE INSURANCE SETTLEMENTS
IN YOUR OWN WORDS
READ MORE [ Insurance Settlements and Legal News ]