Another Force-Placed Insurance Screwing Over, Another Class Action-Seeking Suit By Victimized Homeowner Tagging Banksters For Dirty Deeds

In North Palm Beach, Florida, The Miami Herald reports:

• Think your homeowners insurance is outrageous? Mark Kunzelmann likely has you beat. Kunzelmann, a 49-year-old network specialist, let the policy on his four-bedroom, North Palm Beach home lapse last year. It was a big mistake, he acknowledges.
  
  
• But he can’t believe what the oversight (later remedied) cost him: $10,000 for just a few months worth of coverage. And he has his bank, Wells Fargo, and its insurance partner, Assurant, to thank.
  
  
• As most homeowners are aware, if your property is financed, you have to have insurance to protect the lender. If a bank learns a mortgage holder is not covered, it is allowed to secure a policy and pass the charge on to the customer. In Kunzelmann’s case, Wells Fargo got him a policy that carried a startlingly high cost.
  
  
• How high? Roughly $18,000 a year — of which, he says, the bank got an 11 percent commission. By comparison, Kunzelmann’s old policy, the one he let lapse, was costing him just $2,500. “It left a very bad taste in my mouth,” Kunzelmann said Wednesday. “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 both threats. He recently refinanced his mortgage with another bank. And he has filed a federal lawsuit intended to recoup not just his lost funds, but also those of the thousands of fellow Wells Fargo customers who suffered the same fate.
  
  
• Kunzelmann, with the help of consumer protection attorney Adam Moskowitz, has petitioned the court to broaden his complaint into a class-action suit against Wells Fargo, claiming the lender’s insurance rates have “driven many of their consumers into foreclosure, and saddled others with excessive debt from which they may never find relief.”
  
  
• Kunzelmann’s suit says Wells Fargo received the same 11 percent commission from Assurant for every other force-placed policy the insurance company issued to the bank’s note holders. Wells Fargo has since stopped accepting those commissions, said bank spokesman Tom Goyda — but not before the bank collected $177 million in “pure profit” from Assurant on such transactions, the suit alleges.
  
  
• Kunzelmann accused Wells Fargo of unjust enrichment, and is seeking damages — for himself and the “hundreds of thousands” who he says have been similarly fleeced. Assurant handles 80 percent of Wells Fargo’s force-placed policies, while QBE Insurance — a defendant named in another Moskowitz suit — issues the rest.
  
  
• “We allege that [these policies] are unjust, that they’re not in good faith, and that they’re deceptive,” Moskowitz said. “We’ve heard some really egregious stories.” [...] The suit is one of three similar actions filed by Moskowitz’s firm — Coral Gables-based Kozyak, Tropin & Throckmorton — against banks over lender-placed (or, as the suit calls it, force-placed) insurance policies, including one set for trial later this year.

For more, see Lender and insurer gouged me — and others — Florida homeowner says (A South Florida homeowner is suing, saying he and many others have been gouged by lenders working in cahoots with insurance companies to enact force-placed policies).