A Florida federal judge last week gave preliminary approval to a $300 million class action lawsuit settlement resolving claims that JP Morgan Chase NA and Assurant Inc. overcharged homeowners for force-placed hazard insurance due to kickbacks between the lenders and insurers. A final approval hearing has been scheduled for February 14, 2014.
On October 4, U.S. District Judge Federico Moreno granted preliminary class certification to borrowers who were charged under Chase’s force-placed hazard insurance policy for residential property. His decision came just days after he denied a motion to intervene that was submitted by plaintiffs in a similar California case, in which they argued that the class action settlement would prematurely and unfairly end their lawsuit with an illusory nationwide settlement that was designed to encourage minimum participation from claimants.
The California plaintiffs filed their class action lawsuit in 2011. In their motion to intervene, they argued that the proposed terms of the Chase force-placed insurance class action settlement would provide claimants with just a fraction of the $300 million that will be paid out. Judge Moreno will allow the plaintiffs to raise their objections during the February Fairness Hearing.
Under the terms of the Chase force-placed insurance class action settlement, Chase, Assurant and several affiliates will pay Class Members a refund of 12.5 percent on their net annual premiums. They will also agree to discontinue their allegedly wrongful force-placement practices.
The Florida class action lawsuit, initially filed in 2012, involves requirements by Chase in its standard mortgage agreement that obligated borrowers to maintain wind and hazard insurance on their properties. The agreement allegedly included a clause allowing Chase to obtain new coverage at the borrower’s expense in the event that the required coverage lapsed.
The plaintiffs in the Florida Chase Bank class action lawsuit do not dispute Chase’s right to place insurance coverage, but they do accuse Chase and Assurant of teaming up to artificially increase the premiums “well beyond the cost of coverage.” They blame the high cost on kickbacks paid by the insurers to lenders that obtained force-placed insurance coverage. According to the class action lawsuit, the kickbacks included commissions, inexpensive administrative services and questionable reinsurance agreements with bank affiliates.
Class Members of the Chase Bank class action settlement include all U.S. borrowers who were charged for force-placed hazard insurance by Chase for residential property, and who either paid or still owe the premium charged by Chase for the force-placed policy.
Details on how to file a claim for the Chase forced-placed insurance settlement were not immediately available. Keep checking Top Class Actions or sign up for our free weekly e-newsletter below to receive updates on this case and other class action lawsuits and settlements. [UPDATE: Detailed claim filing instructions can be found here.]
Any Settlement Class Member who wishes to be excluded from the class must submit a Request for Exclusion to the Settlement Administrator, postmarked no later than January 15, 2014.
The Florida plaintiffs are represented by Adam M. Moskowitz, Harley S. Tropin, Tucker Ronzetti, Rachel Sullivan and Robert J. Neary of Kozyak Tropin & Throckmorton PA; Aaron S. Podhurst and Peter Prieto of Podhurst Orseck PA; and Lance A. Harke, Sarah Engel and Howard M. Bushman of Harke Clasby & Bushman LLP.
The Chase Bank Force-Placed Insurance Class Action Lawsuit is Salvatore Saccoccio et al. v. JPMorgan Chase Bank NA, et al., Case No. 1:13-cv-21107, in the U.S. District Court for the Southern District of Florida.
UPDATE: A federal judge granted final approval to the $300 million JPMorgan Chase Force-Placed Insurance Class Action Settlement on Feb. 28, 2014.
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