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What can I do if my mortgage lender or servicer is charging me for force-placed homeowner's insurance?

Make sure you have your own homeowner’s insurance and send proof to your mortgage servicer.

If you don’t have homeowner’s insurance, or don’t have enough homeowner’s insurance, or your homeowner’s insurance has lapsed, here are steps you can take:

  1. Contact your insurance carrier as soon as possible and get a new insurance policy or ask to have your old policy reinstated. If you don’t do this, you may have to pay for costly force-placed homeowner’s insurance if you’re not otherwise covered.
  2. Once you have a new or reinstated homeowner’s insurance policy in place, send proof of the policy and any other information that your mortgage servicer has requested to your mortgage servicer. Request that your mortgage servicer cancel the force-placed insurance policy it obtained for you as soon as possible.
  3. If you disagree with an action your mortgage servicer took with your insurance, you can send a notice of error, which is a letter to your mortgage servicer saying that there was an error and disputing the error.

Your servicer may require force-placed insurance when you do not have your own insurance policy or if your own policy doesn’t meet the requirements of your mortgage contract. In many instances, this insurance protects only the lender, not you. The servicer will charge you for the insurance. Force-placed insurance is usually more expensive than finding an insurance policy yourself.

If your homeowner’s insurance coverage was cancelled because your mortgage servicer failed to make timely insurance premium payments from your escrow account, then you may want to consult an attorney.   

If you have a problem with your mortgage, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).