Forced Placed Homeowners Insurance Policies
Written by Emil Fleysher | July 3, 2012 | Bankruptcy
If you think your homeowners insurance is too expensive, then you would be interested to hear Mark Kunzelmann’s story. Mr. Kunzelmann is a 49-year-old network specialist, and just over a year ago he let the policy on his four-bedroom, North Palm Beach home expire.
But you would not believe what the oversight, which was later remedied, cost him, approximately $10,000 for a few months worth of coverage. If your home is financed then you must have insurance that protects the lenders interest in the property. If for some reason you let the policy lapse, then your bank can obtain a force placed insurance policy and pass on the charges to you. In Mr. Kunzelmann’s case, his lender, Wells Fargo got a policy that was way above his budget.
The policy that was acquired cost him nearly $18000.00 dollars a year, and Wells Fargo got an 11 percent commission form Assurant. Turns out many lenders have relationships with insurance companies and when homeowners allow their policy to lapse they will turn to that entity for a policy. Needless to say but “It left a very bad taste in my mouth,” Kunzelmann said. “I told them, ‘If you do this to me, I’m going to sue you and take my business elsewhere.’ ” Kunzelmann has followed through on his threats. He recently refinanced his mortgage with another lender, and has filed a federal lawsuit in order to recoup not just his lose, but the loss of the thousands of fellow Wells Fargo customers who suffered a similar fate.
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