Defendants in the HSBC Flood Coverage: Forced Placing Insurance lawsuit is Assurant, HSBC, and a handful of other companies. Whether or not they are liable in this case depends on whether the Plaintiffs were misled. If they were, this article will explain their role in the lawsuit. After all, you want to get the best deal possible when purchasing a home insurance policy.

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HSBC

The HSBC Flood Coverage: Forced-Placed Insurance class action lawsuit claims that the bank knowingly deceived consumers into buying flood insurance policies that are inflated. The bank is accused of taking kickbacks for steering customers into inflated flood insurance contracts. The lawsuit states that HSBC owed the Plaintiffs a fiduciary duty to protect their interests and not use the money to benefit themselves.

Defendants counter that Plaintiffs’ breach-of-contract claims rest on a faulty interpretation of the law. Defendants contend that federal law authorizes them to require flood insurance. They also argue that relevant federal regulations do not prohibit them from requiring such insurance. Rather, the relevant question is what the HUD requires. The plaintiffs’ arguments are based on their interpretation of federal law.

Financial firms are increasingly facing a force-placed insurance lawsuits. This practice puts financially-burdened homeowners in an even greater financial crisis and increases their risk of foreclosure. Forced-placed insurance is expensive and provides less protection than voluntary coverage. New York State’s Department of Financial Services is investigating banks that force homeowners to buy such policies. HSBC Flood Coverage: What is the Case?

Assurant

A New York-based HSBC insurance kickback class action lawsuit has been approved. It alleges that the bank illegally induced homeowners to buy inflated flood insurance policies to earn a kickback from its American Security Insurance Co. subsidiary. The settlement also seeks to bar the bank from choosing higher insurance for homeowners. The parties to the lawsuit filed a joint status report in January.

The proposed settlement returns 90% of commissions paid to the Defendants and bars them from ordering higher insurance for their customers when the policy expires. Flood insurance is already expensive, but a proposed regulation will drive costs up further. The Homeowner Flood Insurance Affordability Act of 2014 and Biggert-Waters Flood Insurance Reform Act of 2013 will further drive up costs for flood insurance.

The plaintiffs argue that the Defendants are violating federal law by forcing homeowners to purchase flood insurance. They argue that the mortgage agreement requires homeowners to purchase flood insurance in an amount equal to the mortgage amount. In their lawsuit, the Plaintiffs argue that this was not a material breach of contract, because the contract language requires homeowners to carry flood insurance in an amount equal to the mortgage. The Defendants argue that the breach of contract claims rest on an incorrect interpretation of the law.

Defendants

The Defendants in the HSBC Flood Coverage: Forced Insurance lawsuit contend that the Plaintiffs’ breach of contract claims fail because the Plaintiffs failed to state which specific provisions of the mortgage contract were violated. Plaintiffs counter that the language of the mortgage contract was ambiguous and could not be construed to allow the defendants to violate the plaintiffs’ contract.

Plaintiffs’ attorneys allege that HSBC bank induced them to purchase inflated flood insurance policies. They claim the bank took kickbacks to steer them into these contracts and inflated the premiums. The settlement in the HSBC Flood Coverage: Forced Placed Insurance lawsuit provides monetary compensation to approximately 11,000 homeowners and bans the bank from forcing consumers into higher flood insurance policies.

Plaintiffs allege that HSBC knowingly and unlawfully paid kickbacks, commissions, or other compensation to induce them to purchase force-placed flood insurance policies. In addition, they allegedly improperly backdated force-placed flood insurance policies to inflate premiums even though they covered no risk of loss. This, in turn, violates the New York Deceptive Practices Act.

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