Due to the Naples, Florida postal service not forwarding our mail, we did not get our premium bill for our homeowners insurance until 2 weeks after it was due. As a result the insurance was cancelled. We immediately re-insured the property with the same company. However, there was a 17 day lapse in coverage. Sun Trust, would holds the mortgage on the property, forced purchased insurance from a company named QBE. The premium for our homeowners policy was $2,800 which included liability, other structures, medical, and contents. Sun Trust purchased insurance in an amount that was greater the $200,000 the remaining mortgage amount, to include the home only for an annual premium of greater than $14,000. Our pro-rated amount for the 17 days was $671. I had no objection to the bank protecting their investment. What irked me was the premium rip off. Since I have been looking into this "forced insurance" that banks purchase, I discovered that the actual risk to QBE is 2 to 5% greater than normal. This would create a premium of approximately $3,000 max. How does the bank and QBE justify a $14,000 premium.in attempting to complain, I discovered that there are virtually no consumer protections for this kind of activity—either through banking regulations or insurance regulations—although both agencies were sympathetic and told me that this happens a lot. My recourse, which I am taking, is to vote with my feet and finance with another bank, a local bank in Pennsylvania where relationship banking is the rule.
0 comments