Forced to Pay for Excessive Wind Insurance?
Force Placed Wind Insurance
Allegations have surfaced that banks across the country have been force-placing excessive, costly and unnecessary insurance, including windstorm coverage, on unsuspecting borrowers. While mortgage lenders are permitted to impose coverage if the homeowner’s insurance policy lapses, this coverage is typically priced well above the fair market price, and is allegedly being imposed on borrowers in excessive amounts, or in some cases, when such coverage is not necessary. It has been further alleged that banks are receiving kickbacks for these purchases, while some homeowners are left to face default or foreclosure as a result of these excessive policies.
Did your bank or mortgage lender force you to pay for windstorm insurance? If this coverage was unnecessary, backdated or excessive, you may be able to make a claim to recover compensation for the high costs of your policy. To find out if you are eligible, fill out our free case review form today with your complaints.
Unnecessary, Retroactive Wind Coverage: What Other Consumers Are Saying
One Florida resident let his windstorm insurance policy lapse in 2010 when he heard that Wells Fargo would no longer be requiring such coverage. He figured that the bank would send him a letter if he failed to carry adequate coverage and, when such notice did not arrive, he thought he saved more than $2000 for that year. Then, in the summer of the following year, he received notice from the bank telling him to buy windstorm coverage for that year, which he proceeded to purchase. He also received another letter saying that because the coverage lapsed for the previous year, he would be charged retroactively for a forced-placed windstorm policy which the bank purchased on his behalf for nearly $12,000.
Bank of America has faced similar allegations, with one customer claiming that he was charged nearly $4500 annually for a force placed policy, even though he already had adequate coverage. He claims that he was forced by his lender to pay for a policy which covered only wind and hail damage and cost twice as much as his regular, comprehensive insurance policy. One Zions Bancorp customer also claimed that after her hurricane insurance lapsed because of an error on part of her insurer, her bank force placed coverage and backdated it a year. Not only did the force-placed policy provide retroactive hurricane insurance for a year in which no hurricanes were seen, it also covered flood and wind damage even though she never allowed policies for these hazards to lapse.
How Can I Get Rid of Excessive Windstorm Coverage?
For borrowers who have been subjected to unfair forced-placed insurance policies, legal recourse may be available. A number of potential class action lawsuits are being considered across the country for homeowners who had to pay for excessive and unnecessary wind, flood and hazard insurance. These suits seek to hold the banks accountable for their allegedly abusive force placed insurance practices and to recover the high costs paid out for these policies. If you had an excessive insurance policy force placed on your property, fill out our free, no obligation case evaluation form today to find out if you have legal recourse to recover compensation. There is no cost or obligation associated with this online review of your claim.