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 Jul-23-14
FORCE-PLACE INSURANCE LEGAL ARTICLES AND INTERVIEWS
Force-Placed Insurance Companies Could Face Government Lawsuit
Washington, DC: In addition to force-placed insurance lawsuits filed by homeowners who allege illegal kickbacks have been involved in lender insurance, companies could face a lawsuit from the federal government. According to reports, the government may sue some mortgage servicers over force-placed insurance kickbacks that may have cost Fannie Mae and Freddie Mac hundreds of millions of dollars [READ MORE]
More Settlements Announced in Force-Placed Insurance Lawsuits
Miami, FL: The recent months have brought news of even more settlements in force-placed insurance lawsuits. In the past few months, various banks and financial firms have announced that they settled lawsuits involving lender insurance. Lawsuits filed against the banks and insurance companies alleged they were involved in an illegal kickback scheme to place insurance on homes and properties [READ MORE]
Midfirst Bank Settles Forced-Placed Class Action for $2.7 Million
New York, NY: Yet another Force-placed insurance lawsuit accusing a major bank of forcing unnecessary flood insurance onto the backs of homeowners at inflated rates and profiting from the forced placement has settled for $2.7 million [READ MORE]
MORE FORCE-PLACE INSURANCE LEGAL NEWS
FORCE-PLACE INSURANCE SETTLEMENTS
IN YOUR OWN WORDS
YOUR FORCE-PLACE INSURANCE STORIES
Publish your Force-Place Insurance experience here for our readers to learn from.
READ MORE [ Insurance Settlements and Legal News ]