Force placed insurance policies to be the topic of official questioning

Florida Homeowners Insurance

Florida regulators will grill Praetorian execs as well as those from two insurers. Regulators in Florida will be questioning executives of two insurers and Praetorian Insurance Company this week regarding their policies and behaviors regarding force placed insurance policies. Significant controversy has been growing around this form of coverage. These policies are imposed on homeowners by lenders when coverage on the mortgaged property has been allowed to lapse or expired, as they are often sold by companies whose rates are unregulated, by surplus lines insurers, or by companies that are…

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New York regulators pressure Citigroup to comply with subpoena

New York insurance regulators are pressuring Citigroup to comply with a subpoena regarding investigations into force-placed insurance. Force-placed insurance has long been a source of controversy. These policies require homeowners to purchase coverage that is much more expensive than conventional policies. This is often done for the sake of lenders who hold sway with insurance companies and the tactic is used to secure returns on these investments. The New York Department of Financial Services has been investigating a number of insurance companies and financial institutions that may have been conducting…

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“Forced Placement” insurance rates are through the roof

“Forced placement” is when a lender buys a policy for a borrower at premiums that can significantly increase the price of insurance.  If you fail to renew your own homeowner’s insurance and the lender finds out, they will automatically purchase this coverage for you.  The new coverage is more expensive and doesn’t have the same coverage as your homeowner’s policy would. J. Robert Hunter of the Consumer Federation of America, feels the problem began because lenders and insurance companies have “set up sweetheart deals… and get all sorts of kickbacks.”…

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