"Force placed" homeowners policies - Banks on the hot seat in NY

Posted 12January2012

New York's insurance regulator is investigating several banks and insurers over prices being charged for force placed homeowners insurance policies. These policies are typically forced upon homeowners who's homeowners insurance polices have lapsed or were otherwise cancelled.

The NY department of financial services is investigating whether or not homeowners were overburdened with excessive premiums during times of financial stress. The department is also investigating whether or not there were improper relationships had occurred between banks and insurance companies including illegal kickbacks for business.

The department has issued subpoenas or demands for information from over 31 banks and insurers including Zurich, Assurant, Bank of America, Wells Fargo and Citigroup.

San francisco Chronicle - via Bloomberg

Have you been force placed on a homeowners policy? Get quotes on a dwelling only policy and see if you can save money compared to the banks bad deal.

A force placed policy is typically a "dwelling only" policy that protects the banks interest in the property itself. Their policies are typically much higher in cost compared to one purchased yourself. If you've been dropped or denied homeowners insurance, then you should know your rights.

You also have the right to purchase your own dwelling only policy with the bank as lien holder which may be much cheaper than the racket prices you may be paying through the banks arrangement. We recommend Insureme who allows you to compare several home insurance policies from major highly rated insurers. They are also unique in that they include free quotes from dozens of local insurance agents in your area. In many cases, independent agents may be able to give you a better deal for becoming one of their customers.

This should not be considered financial advice which can only be given by a qualified financial or insurance professional. We suggest you consult with a licensed financial planner and/or insurance professional who is most qualified to consult with you regarding policy decisions. Many factors are involved in your policy premium and coverage due to water and mold damage, some of which may not be mentioned in this article. We are an affiliate of the Bankrate Insurance Network.

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