Lawyers and Settlements; December 2, 2013
Atlanta, GA: It was bad enough that the Alabama widow lost her home to a fire. However, things went from bad to worse after HSBC Finance Corp. and Assurant Inc. are alleged to have zoomed in with a Force-Place Insurance policy on what remained of her burned-out home.
The woman filed a Force-placed insurance lawsuit, in an attempt to make it right.
Forced-Place Insurance is just that - insurance that is placed on a property by the holder of the mortgage. This is done for a variety of reasons. Perhaps the homeowner has let insurance lapse or has under-insured the property. Were a homeowner to own outright his or her own property, then insurance is at the complete discretion of the owner. However, when a property is mortgaged, the lender obviously requires that the property is protected against fire or other damage.
The problem that critics have with lender insurance of this kind is that forced-place insurance terms are often far more expensive and onerous than standard insurance products. There have also been allegations that lenders maintain cozy relationships with insurers, with kickbacks and other perks that benefit the participants but cost the homeowner substantial dollars.
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