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Lender-Placed Insurance Coverage

Lender-placed (or Force-placed) insurance is coverage that a mortgage lender or bank purchases for property it owns to protect its interests when the homeowner fails to purchase this coverage. This often occurs during situations of abandonment and foreclosure. The premium cost for this insurance is usually higher than conventional homeowners’ premium, and this cost may ultimately be borne by the homeowner.

The high premium costs and the fact that homeowners are often “forced” to pay for this coverage by the lender (mortgage lender/bank) has increased the attention for this type of insurance. Fannie Mae and Freddie Mac guarantee a large portion of the mortgage market nationally and in Florida, and are in the process of revising their rules to require admitted carriers (not surplus lines carriers) to insure this business.

Florida Statute for Collateral Protection Insurance: 624.6085, F.S.

American Security Filing

Praetorian Filing

OIR Press Releases

  • April 11, 2014: Office Orders Praetorian Insurance Company to Modify its Business Practices for Lender-Placed Insurance in Florida
  • October 8, 2013: Office Disapproves American Security Insurance Company’s Lender-Placed Insurance Rate Filing and Issues Order to Decrease Rates by Approximately $51 Million
  • May 9, 2013: Office Announces Public Rate Hearing for American Security Insurance Company's Lender-Placed Insurance Program
  • February 11, 2013: Office Approves Praetorian Insurance Company's Second Rate Filing for Lender-Placed Insurance
  • August 10, 2012: Office issues Notice of Intent to Disapprove Praetorian’s Rates
  • July 2, 2012: Office announced Public Rate Hearing for Praetorian Insurance Company

NAIC Releases/Consumer Alerts

  • August 2012: Consumer Alert: Protecting an Investment: What Consumers Need to Know About Lender-Placed Insurance
  • June 27, 2012: Press Release: Insurers to Hold Hearing on Lender Placed Business

Fannie Mae Guidelines

  • October 1, 2012: SVC 2012-17 – Updates to Hazard Insurance Coverage Policy
  • May 23, 2012: Fannie Mae Effective Date of Lender Placed Guidelines
  • March 14, 2012: SVC 2012-4 - Update to Lender Placed Property Insurance/Hazard Insurance Claims Processing

Federal Register Notices

Federal Housing Finance Agency

  • November 5, 2013: FHFA Directs Fannie Mae and Freddie Mac to Restrict Lender-Placed Insurance Practices

Consumer Financial Protection Bureau

  • January 17, 2013: Consumer Financial Protection Bureau Rules Establish Strong Protections For Homeowners Facing Foreclosure
  • August 10, 2012: Consumer Financial Protection Bureau Proposes Rules to Protect Mortgage Borrowers