Lawsuit Investigation: Are Banks Docking Loss Draft Insurance Checks for Inspection Fees?
Last Updated on March 7, 2023
Attorneys working with ClassAction.org are no longer investigating this matter. The information here is for reference only. A list of open investigations and lawsuits can be viewed here.
At A Glance
- This Alert Affects:
- People who submitted claims to their homeowners’ insurance for more than $10,000 and were required by their bank to have their property inspected before getting a check for the damage.
- What's Going On?
- It’s believed that some banks are passing off the cost of these inspections to the homeowners themselves. Attorneys working with ClassAction.org believe that this practice violates the homeowners’ mortgage agreements and are looking to get class actions filed.
- How Would I Know If I Was Charged for the Inspection?
- Unfortunately, you may not know. For some, the inspection fees are either taken out of the insurance check or deducted from the homeowner’s escrow account.
Attorneys working with ClassAction.org want to hear from anyone who submitted a claim to their homeowners’ insurance for more than $10,000 and were required by their bank to have their property inspected before getting paid for their claim.
It is believed that some banks are docking homeowners’ insurance checks – known as “loss draft” checks – or deducting money from their escrow accounts to cover inspection costs, sometimes without the homeowner ever knowing.
Attorneys working with ClassAction.org have reason to believe this practice violates homeowners’ mortgage agreements and are looking to get class action lawsuits started.
Loss Draft Inspection Fees: What’s Going On?
When damage to a property exceeds $10,000, many large banks have special procedures in place to deal with these types of claims.
In these instances, the banks will hold on to the homeowner’s insurance check – known as a loss draft check – until after an inspection is performed to confirm that repairs are actually being made.
It is believed that some banks are making homeowners unknowingly pay for these inspections rather than cover the cost themselves.
How Can a Class Action Help?
A lawsuit could help homeowners recover the money they were cheated out of because of the inspection fees. It could also require banks to change the way they handle fees for inspections that they require.
How Can I Find Out If This Happened to Me?
If your bank required an inspection after you submitted a homeowners’ claim, it may be difficult to determine whether you were charged inspection fees. An attorney, however, can help go over your insurance and escrow documents to help determine whether you had any money docked for these inspections.
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