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Forced Place Insurance in Massachusetts (Part B)

Deceptive Forced Place Insurance Practices

While it is necessary to have insurance on a home that is under mortgage, some lenders use forced place insurance as a reason to increase the homeowner's fees. Forced place insurance policies are typically more expensive than the homeowner's insurance you can buy yourself.

There have even been cases where mortgage lenders have forced borrowers to pay for a forced place insurance policy they didn't even need in order to increase their own profits.

Remember, forced place insurance policies are designed to protect the mortgage lender, not you. The forced place insurance policy may not even cover the full value of your property, only the amount owed on your loan. Additionally, many of these policies only cover the home's structure, not its contents. If your home and possessions are damaged, you may face an enormous loss.

A forced place insurance policy should only be applied when the lender learns that homeowner's insurance has lapsed. Once the homeowner obtains insurance coverage again, the forced placed insurance policy should be at least partially cancelled.

When a mortgage lender purchases forced place insurance on the homeowner's behalf, they typically select an extremely expensive policy. In some cases a homeowner may be charged rates that are 3 times higher than what would be charged elsewhere. Often, the forced place insurance provider is affiliated with the mortgage lender, and the insurance is padded in order to protect the lender from risks or losses.

Some mortgage lenders even charge homeowners more than the actual cost of the forced place policy. Not only is this unethical, but the homeowner is entitled to compensation for the excess cost.

Filing a Massachusetts Class Action Lawsuit

If your mortgage lender has unfairly placed a forced place insurance policy on your home, you should speak with an experienced Massachusetts consumer rights lawyer regarding the possibility of a class action lawsuit. A class action case may cause the lender to stop their deceptive insurance practices and may allow you to receive compensation for your monetary losses. Contact the Massachusetts class action lawsuit lawyers at Phillips & Garcia P.C. today for more information regarding your specific case.

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