Another Assurant Force-Placed Insurance Class Action Filed

On May 5, Assurant Inc. and Wells Fargo & Co. were sued in a force-placed insurance class action lawsuit, alleging these companies artificially increased premiums for force-placed insurance in order to illegally reap profits from borrowers.

According to the Wells Fargo Assurant force-placed insurance class action lawsuit, Wells Fargo Bank and Assurant were partners in a force-placed insurance plan to provide expensive hazard insurance to mortgage borrowers who did not have their own hazard insurance plan. However, when a policyholder sustained water damaged to their mortgage property, Assurant then allegedly failed to provide these individuals with relief.

Additionally, Wells Fargo and Assurant allegedly made an exclusive contract, wherein Wells Fargo would force-place insurance policies with Assurant and charged mortgage premiums reportedly up to 10 times the market value for similar insurance policies. After charging borrowers for these expensive force-placed insurance plans, Assurant would then use these collected premiums to award Wells Fargo with kickbacks for force-placing the hazard insurance plans in the first place, according to the Wells Fargo Assurant force-placed insurance class action lawsuit.

This is the second class action lawsuit filed against Assurant this month, similarly alleging the company engaged in an illegal force-placed insurance with another mortgage lender to create a mutually beneficial kickback scheme. Just a day before this complaint was filed, Assurant was hit with another force-placed insurance class action lawsuit, claiming the company had partnered with PNC Bank and engaged in similar illegal force-placed insurance practices. Additionally, back in March, Assurant and Wells Fargo agreed to a force-placed insurance class action settlement, which stated Assurant and Wells Fargo agreed to pay homeowners 7 to 11 percent of their paid force-placed insurance premiums.

Plaintiffs Jeffrey Navin and John O’Reilly, a property owner and manager respectively, filed this new Wells Fargo Assurant force-placed insurance class action lawsuit, claiming Wells Fargo and Assurant did not disclose to mortgage owners that they were making money off their force-placed insurance policies, and therefore breached contracts with its borrowers.

According to the Wells Fargo Assurant class action lawsuit, “When a claim was put in for serious water damage, Defendant Insurant [Assurant], after agreeing to compensate the claim, took the total proceeds and kicked them back to Wells Fargo and America’s Servicing Company. Plaintiffs were left with no repair of the damage and no proceeds from the claim to repair the damage.”

Navin further alleges that he personally was charged $10,000 a year in premiums for his hazard insurance force-placed by Wells Fargo and provided by Assurant.

Plaintiff O’ Reilly claims that when he attempted to use his hazard insurance to repair the water damage to his ceiling that also caused a sink to collapse on his wife, the force-placed hazard insurance for which he was paying an exorbitant amount could not help him. According to his force-placed insurance class action lawsuit, it is possible that the water damage exposed him, his wife, and his son to harmful germs and fungi.

Both O’Reilly and Navin allege Wells Fargo and Assurant violated Racketeer Influenced and Corrupt Organization Act with their alleged force-placed insurance and kickback activities. In this Wells Fargo Assurant forced-placed insurance class action lawsuit, the plaintiffs are seeking damages in the amount earned by companies through this alleged kickback scheme, as well as an injunction on future misconduct from Wells Fargo and Assurant and payment of other costs.

Navin is represented by Kenneth R. Davis of Kenneth R. Davis, Attorney At Law. John O’Reilly is representing himself.

The Wells Fargo Assurant Force-Placed Insurance Class Action Lawsuit is Navin, et al v. Wells Fargo Bank NA, et al., Case No. 3:15-cv-00671, in the U.S. District Court for the District of Connecticut.