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New Jersey-based Force-Place Insurance Class Action Can Proceed

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Newark, NJAccording to court documents, plaintiff Robert DiGiacomo took on no fewer than four defendants in his class-action Force-placed insurance lawsuit. Those defendants include Statebridge Company LLC, American Modern, American Modern Insurance Group (AMIG), and Midwest Enterprises. Allegations include breach of contract, breach of implied covenant of good faith and fair dealing, violation of the New Jersey Consumer Fraud Act (NJCFA), breach of fiduciary duty, and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO).

The defendants, or so it is alleged, “manipulated the force-placed insurance market through collusive agreements involving kickback arrangements and other forms of improper compensation,” DiGiacomo says in his Force-Place Insurance class action.

The defendants immediately filed a petition with the court to have the lawsuit dismissed on various grounds. In his decision this past June, District Court Judge Joseph E. Irenas of the US District Court for the District of New Jersey agreed with the defendants and granted their motion, in part, related to DiGiacomo’s breach of contract claims. However, the remainder of the defendant’s motion to dismiss was denied.

The Lender insurance lawsuit will proceed.

Forced-Placed Insurance Lawsuits regularly appear on the horizon when insurance companies and mortgage lenders (most often banks) combine to issue insurance products that are alleged to be more expensive for the homeowner, with less coverage than standard products. The allegations are that higher fees translate into kickbacks benefiting the lender and/or the insurer.

Owners of a property with a mortgage are legally required to carry sufficient insurance in order to cover the value of the real asset in the event of total loss. Sometimes this coverage is allowed to lapse through neglect or financial hardship. Were the bank holding the mortgage to determine that insurance had been allowed to lapse, then the mortgage holder has the right to step in and force-place lenders insurance on the property with the participation of an insurance company.

It’s a reasonable and legal act.

The problem, according to various plaintiffs bringing Forced-Placed Insurance lawsuits, is that insurance coverage is found to have forced-placed insurance terms that are more expensive than standard insurance, and with less coverage. There have also been cases when Force-Place insurance has been mandated where not appropriate.

The case is Robert DiGiacomo v. Statebridge Company LLC et al., Case No. 14-6694, in the US District Court for the District of New Jersey.

Force-Place Insurance Legal Help

If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an insurance lawyer who may evaluate your Force-Place Insurance claim at no cost or obligation.
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READER COMMENTS


Posted by

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my insurance company ( sentry) quit it’s coverage of homes. my independent agent (assurant) sent a letter to me stating i would be getting a copy of a new policy from an insurance company and to review it and sign it for new coverage. i was placed with safeco home insurance. within a few weeks i get a call stating i would be getting a check from safeco and to cash it and send a check to the independent agent made out to american modern. i did what i was told never seeing a policy from new american modern. the policy was paid from my escrow account through bank of america.
i just recently had a water pipe explode in my home and cause mold and water damage, my claim was turned down by american modern. when we got a copy of our policy we had coverage for volcano damage, water sump coverage (we have no water sump pump) etc. the policy coverage was a joke. long story short we never signed for the coverage and the company refuses to call us back nor let us come in for an appointment. they cannot provide a signature page and they are staying away from us.someone called into safeco claiming to be me cancelling the initial home policy with them. then they called bank of america and told them i was now with american modern and they would be receiving payments from my escrow account.

Posted by

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I was given a 3,000.00 monthly forced pkace insurance on my 1 family house

Posted by

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I have a forced placed insurance case that my attorney allowed the bank to dismiss without prejudiced 8/24 2015 due to unpaid taxes and I think my lawyer should not allowed it

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