AG Returns $6.3 Million to Homeowners After Investigation of Improper Charges by Insurance Company
Following an investigation and audit by Attorney General
The total amount of refunds was established by an audit performed by AG Healey's Office into the practices of
"Our investigation found that this insurance company was charging consumers for costly and duplicative coverage," AG Healey said. "As a result of our audit, 4,500 homeowners will be getting a check in the mail after being forced to pay for products they did not need."
Although force-placed insurance is only intended for circumstances in which the borrower has failed to adequately insure the mortgaged property, the Attorney General's audit of Assurant found thousands of cases of duplicative insurance coverage for
Force-placed insurance is a type of property insurance that mortgage servicers can purchase on behalf of borrowers if they fail to maintain adequate homeowners insurance coverage on mortgaged properties. Mortgage servicers often hire insurance companies like Assurant to monitor whether borrowers are maintaining adequate homeowners insurance coverage and to issue force-placed insurance policies when appropriate homeowners coverage is not in place.
Premiums for force-placed policies are high--often two or three times as expensive as regular homeowners insurance--and the coverage provided is quite limited. Some mortgage servicers accept commission payments from force-placed insurers, which contribute to the high cost of force-placed insurance and create conflicts of interest for mortgage servicers.
AG Healey is a national leader on the issue of force-placed insurance. In
This case was handled by Assistant Attorney General
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