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Forced Placed Insurance has been found to be suitable



No one likes to pay insurance premiums. People simply hate paying the premium on a policy that is forced by a mortgage. Homeowners, with mortgage loans – direct or reverse – are required to protect the lender by placing insurance that protects against the risk of loss of the property as collateral for the loan. When the insured does not make the insurance, the lender may place insurance and debit the borrower for what they have paid. Also, the cost of compulsory insurance is greater than the insured would pay if the insured bought the insurance as an individual. Charles Johnson v Sun West Mortgage Company, Inc., et al. B283262,
California Appeal Court, California Second Appellate District Division One (March 29, 201

9) Johnson appealed a judgment filed after an order to leave the summary judgment appeals brought by Sun West Mortgage Company and Proctor Financial . Johnson acquired a reverse mortgage loan from Sun West. After failing to maintain insurance required by the trust protection that secured its reverse mortgage loan, Sun West acquired a lender insurance policy on the property. Sun West acquired the policy through Proctor, the insurance company's agent.

In his complaint, Johnson claimed that Sun West and Proctor had collaborated to overwhelm him and other reverse mortgage customers. At the hearing, the court gave the right to a meeting.

BACKGROUND

Johnson received a reverse mortgage loan secured by a home security trust. At his disposal, Johnson declared that he did not sign the act of trust. He admitted, however, that he "got the benefit of the reverse mortgage loan."

The confidence that ensured Johnson's reverse mortgage demanded that he retain Fire, Flood and Other Hazard Insurance.

Johnson testified that at the beginning of 1963 he understood that he was obliged to keep flood insurance for his home and had always done so. Johnson told us that during his discussions with the agent who sold him his reverse mortgage, the agent told Johnson that he did not need flood insurance. Johnson let its flood policy expire in February 2009.

Sun West and Proctor have signed contracts for Proctor to provide Sun West's power or lender-specific insurance, flood compliance and risk insurance compliance tracking, and Sun West reverse mortgage borrower loan guarantees. Proctor revised Sun West's reverse mortgage loans, including Johnson's. As part of that audit, Proctor and Sun West discovered that Johnson did not have flood insurance required by his trust. Proctor, on behalf of Sun West, went through the process of flood insurance placed on Johnson's home in accordance with the actions of trust. Sun West was charged – and advanced on Johnson's behalf – $ 2,687.44 for a policy of USD 247,060 coverage for each 2012 and 2013.

In 2013, Johnson received flood insurance with a coverage limit of $ 237,000. He paid a premium of $ 247. After Johnson received flood insurance and provided evidence for Sun West, Sun West Johnson repaid $ 1,951.08 for the unused portion of his 2013 lender-placed flood insurance.

DISCUSSION

Sun West and Proctor shifted the summary judgment Burden to Johnson [19659012] Johnson's complaint and his declaration of evidence were based on his claim (and his expert testimony) that the price of the Sun West insurance placed on Johnson's property and then accused him of being unreasonable . In appeal, Johnson claims that, according to the trust, the amount Sun West charged Johnson with for insurance included amounts that were not "necessary" to secure Sun West's interest in Johnson's property.

Johnson supported his theory by pointing out that the insurance he secured for his own property costs a small portion of the price Sun West charged him for the insurance it placed on his property after Johnson's flood insurance expired. Among other bad acts, Johnson alleged that Sun West had constructed its profit at the expense of "failing to seek competitive bidding [for lender-placed insurance] on the open market."

Proctor and Sun West produced evidence that the Sun West Proctor Agreement was the product of a competitive bidding process and that Proctor was a low bidder in that process, as opposed to claims made by Johnson. The Court summarized: Sun West "placed competitive bids in a competitive market. They chose the lowest. There is no evidence of any lower available rate on this market." And Sun West told Johnson exactly what Sun West paid Proctor for the insurance it provided Johnson's property.

Sun West and Proctor provided evidence that the Sun West insurance price placed on Johnson's home was not unreasonable. The evidence also showed that Johnson's failure to maintain flood insurance in the home made it necessary for Sun West to incur the cost of insuring his home. Consequently, the burden was shifted to Johnson to show that there was a pleasant matter of material fact.

In the court of law, Johnson strongly founded the declaration of Mr. Birnbaum, a person who was submitted as an expert witness. Birnbaum made a declaration to oppose Sun West's and Proctor's evidence and raise a factual matter. However, after a long-standing account of its reliability, the trial excludes the Birnbaum Declaration in its entirety, as it was a legally brief, not a true expert opinion, and had a sense of slander that made it clearly unreliable. Because a court can ask not only what kind of material an expert invokes, but also whether that material actually supports the expert's reasoning.

As a result, there was no abuse of the discretionary discretion of the Birnbaum Declaration.

Johnson's actions made the full cost of the premium required for Sun West to incur, and there is no evidence that Sun West suffered Johnson's failure to fulfill his contractual obligations. Ultimately, there is no evidence in the document that the Court could conclude that the Johnson price paid Sun West for its lender-specific insurance, was either unreasonable or unnecessary.

When the plaintiff argued that he was overcharged for a compulsory insurance policy, it is best to keep an expert who actually understands the obligation of an expert witness and who knows how compulsory insurance is priced. Instead, Johnson hired a lawyer who acted as a lawyer, rather than an expert, and explained something that is not understood by the average person. If there was evidence that Johnson was overcharged, a broker representing insurers writing compulsory insurance for lenders would have completed the day. A person who claims to be an expert acting, rather than an advocate, will be consistently ignored.


© 2019 – Barry Zalma

This article and all blog posts on this site, melt and summarize cases published by courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, condensed to facilitate reading and convey the author's views in each individual case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance management, bad faith assurance, and insurance fraud nearly equal for insurers and policyholders. He also serves as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance cover and law firm and more than 50 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual liability magazine / ACE Legend Award.

Over the past 51 years Barry Zalma has put his life on insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their staff to become insurance managers.

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