ABBEY SPANIER, LLP INVESTIGATING CLASS ACTION CLAIMS RELATING TO UNFAIR "FORCE-PLACED INSURANCE" PRACTICES
NEW YORK, May 29, 2012 - The law firm of Abbey Spanier, LLP announced today that it is investigating potential federal and state claims against numerous banks and insurance companies for their unfair "force-placed insurance" practices.
In order to obtain a mortgage, lending banks often require homeowners to maintain specified levels of insurance on their property. Many homeowners do not realize that pursuant to the mortgage loan contract, if they allow their insurance to lapse, the lending bank is legally entitled to forcibly place insurance on the property (i.e. purchase insurance for the home and then charge the homeowner/borrower the full cost of the premium). However, the force-placed insurance practices of many banks appear to be unfair because these lenders have: (i) purchased insurance coverage that costs far greater than the homeowner's previous coverage; (ii) received commissions or kick-backs from the insurer for the forced-placed coverage; (iii) billed homeowners for additional coverage that was not required under their mortgage agreement; (iv) backdated the force-placed insurance policies to charge for retroactive coverage; and (iv) allowed the homeowner's existing coverage to lapse without providing adequate notice that they would purchase force-placed insurance.
In October 2011, The New York State Department of Financial Services, which supervises both the New York insurance and banking industry, commenced an investigation into "force-placed insurance." That investigation has recently intensified with several days of public hearings to "review whether rates for force-placed insurance are appropriate or excessive and to examine the relationships between and payments to and from insurers, banks, mortgage servicers and insurance agents and brokers."
Abbey Spanier is investigating the force-placed insurance practices of numerous banks and financial services companies, including Wells Fargo Bank, N.A., JPMorgan Chase Bank, N.A., HSBC Mortgage Corporation (USA), GMAC Mortgage, LLC, Bank of America, N.A., Balboa Insurance Company, QBE Insurance Corporation, QBE Financial Institution Risk Services, Inc., American Security Insurance Company (Assurant), American Bankers Insurance Company of Florida (Assurant), Meritplan Insurance Company, American Modern Home Insurance Company, Empire Fire and Marine Insurance Company, and Fidelity and Deposit Company of Maryland.
If your bank/lender has engaged in unfair business practices relating to force-placed insurance and you would like to discuss our investigation, please contact:
Nancy Kaboolian, Esq. or Richard B. Margolies, Esq.
Abbey Spanier, LLP