Wells Fargo and QBE settle for $19.25 million over force-placed insurance
May 17, 2013
The following article was published in the South Florida Business Journal on May 17, 2013:
Wells Fargo and QBE settle for $19.25 million over force-placed insurance
By Brian Bandell
Wells Fargo Bank and QBE Insurance have agreed to settle a class action lawsuit filed by several Miami-Dade County law firms on behalf of Florida homeowners given force-placed insurance for $19.25 million, South Florida Business Journal’s Brian Bandell reported today, May 17, 2013.
The complaint, filed in 2011, alleged that Florida homeowners were overcharged, then Wells Fargo assigned property insurance from QBE on their homes. The lawsuit alleged that Wells Fargo unfairly took commissions that were included in the premiums for this insurance.
Lenders often order forced placed insurance when property owners decline to buy coverage themselves, often when the loan is in default.
The class was certified in 2012, and more than 24,000 homeowners were notified. During the class period, from April 2006 to February 2013, the class members were charged $77 million for force-placed insurance, according to the settlement documents.
The trial was scheduled to start in July. Instead, the parties reached a settlement for a refund of the amount charged for forced-placed insurance to the members of the class.
The borrowers who paid the premium will be refunded 25 percent in cash. Those who were charged the premium but didn’t pay will get a credit of 25 percent off their bill.
In addition, the defendants agreed to pay up to $5.48 million of the plaintiffs’ attorney’s fees and costs.
After the lawsuit was filed, Wells Fargo said it would no longer purchase force-placed insurance from QBE in Florida.