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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Class Action.org is dedicated to protecting consumers and investors in class actions and complex litigation throughout the United States. Class Action.org keeps consumers informed about product alerts, recalls, and emerging litigation and helps them take action against the manufacturers of defective products, drugs, and medical devices. Information about consumer fraud issues and environmental hazards is also available on the site. Visit http://www.classaction.org today for a no cost, no obligation case evaluation and information about your consumer rights.
ClassAction.org
Hannah Armstrong
800-449-1970
pressrelease@lawyercentral.com
Source: EmailWire.Com
