Flood Insurance Force Placed By Your Lender?
Last Updated on June 26, 2017
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At A Glance
- This Alert Affects
- Property owners who were forced or coerced into buying excessive flood insurance by their mortgage company or bank.
- Company(ies)
- M&T Bank, Fifth Third, Dovenmuhle, Provident Funding, Flagstar and Capital One
- Additional Details
- Most residences in Special Flood Hazard Areas are already insured by flood insurance policies. If a bank or mortgage company forces a property owner to buy an additional insurance policy, the consumer is paying for a second policy which is valueless to the consumer, as the National Flood Insurance Program ("NFIP") will not pay twice for an insurable loss.
- Type of Lawsuit
- Class Action
Allegedly, certain banks and mortgage companies have been force-placing expensive, and often unnecessary, flood insurance policies on property owners, many of whom already meet the insurance coverage requirements of the National Flood Insurance program. Furthermore, lawsuits for bank flood insurance complaints have claimed that these companies may be receiving kickbacks or commissions when they purchase these additional or excessive policies, the cost of which is added to the homeowner's monthly mortgage payments, deducted from the home equity account or otherwise expensed to the borrower.
Force Placed Flood Insurance Lawsuits
Consumers may be eligible for a force placed flood insurance lawsuit if their bank or mortgage company forced or coerced them into:
- Purchasing costly flood insurance in excess of what is required by law
- Paying for or maintaining more flood insurance than what is outlined by their mortgage agreements
- Paying for a forced-placed second insurance policy after having an acceptable flood insurance policy refused
- Purchasing a second flood insurance policy even though they were already covered by an existing flood insurance policy through a condominium association or otherwise
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