A federal judge in Florida has elevated a force-placed insurance lawsuit against Wells Fargo to class action status. According to the suit, Wells Fargo purchased hazard insurance on behalf of borrowers whose homeowner policies had expired, a practice known as “force placing.” While banks are generally permitted to purchase forced-placed insurance for homeowners, they are not permitted to collude with insurance companies in raising the cost of that insurance by paying themselves unwarranted commissions. Allegedly, this is what Wells Fargo and QBE insurance Inc. had been doing.
Wells Fargo customers forced to pay for an overpriced insurance policy may have legal recourse to recover a monetary reward, including premiums paid out of this coverage.
Lenders often require that borrowers purchase hazard insurance on their property to protect creditors from situations in which an uninsured homeowner’s property is damaged. Most mortgage contacts allow banks to purchase this insurance at the homeowner’s expense for a fair price. The Wells Fargo forced placed insurance lawsuit was filed on behalf of borrowers who have allegedly been overcharged for homeowner’s insurance to the hidden financial benefit of the bank and its subsidiaries. Further allegations against Wells Fargo include backdating the forced hazard insurance to the date the homeowner’s policy expired and threatening to retaliate against those who come forward with a lawsuit. Each of these practices is allegedly illegal and may create an unnecessary financial burden on individuals and families who may already be struggling financially.
Forced Placed Hazard Insurance Attorneys
Although banks are, in most cases, permitted to purchase a hazard insurance policy on behalf of a homeowner, they are not legally allowed to overcharge homeowners and compensate themselves for commission on the sale. Furthermore, it is also illegal for Wells Fargo, or any other bank, to backdate forced placed insurance and threaten potential claimants with retaliation. Homeowners that have been overcharged for property insurance by Wells Fargo, or any other lender, may be eligible to participate in a forced placed insurance lawsuit seeking a reward for damages and losses, including premiums paid out of this coverage.