Probe Leads Insurer To Cut Force-Placed Premiums By 20%

Law360, New York (November 29, 2012, 3:31 PM EST) -- American Modern Home Insurance Co. has agreed to reduce its premiums for force-placed homeowners insurance by more than 20 percent after an investigation showed rates were artificially high, the California Department of Insurance said Thursday.

Force-placed insurance, also called lender-placed, is controversial because it forces homeowners to purchase it in certain situations, the department said. It is primarily intended to protect a lender's interest in a property if homeowners allow their insurance to lapse. Lenders bill homeowners for the premiums, which cost far more than policies...
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