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Still waiting and unable to fight back: How one type of insurance can leave you vulnerable

Experts warn consumers to avoid a certain type of force-placed insurance.
Force placed insurance
Posted at 12:27 PM, Jun 23, 2023
and last updated 2023-06-23 12:27:48-04

PORT CHARLOTTE, Fla. — More than eight months after Hurricane Ian ripped the roof off of Fran Kowalczyk’s Port Charlotte home she still has water dripping into her home every time it rains.

There are water stains in her living room.

The ceiling on her enclosed lanai has huge gaping holes.

And there’s a constant hum of multiple air purifiers running at all times.

“I’m very concerned about mold I’m very concerned about my health, because I’ve had issues,” Kowalczyk told Fox 4 Investigates.

“Since the Hurricane, I’ve been in the emergency room, and I’ve been to two different doctors.”

Kowalczyk believes a new roof can help solve many of those issues, but there’s a problem.

“Completely denied it,” Kowalczyk says of her insurance provider. “Even though I put in an appeal, denied it.

Last summer, before Ian hit, Kowalczyk was dropped from her longtime insurance provider.

“The next thing I know my mortgage company sent me a letter that said this was taken care of. I said, ‘great, now I have a policy,’” Kowalczyk said.

But it wasn’t a normal insurance policy.

Kowalczyk was put into what’s called lender-placed or force-placed insurance.

As in, your mortgage company forcefully takes out an insurance policy on the home.

While it may be convenient, it meant Kowalczyk didn’t have to shop around for deals, it comes with a catch.

According to an analysis done by staffers to the Florida House of Representatives with force-placed insurance it’s the mortgage company that is the policy holder.

Which means, according to the staff analysis, the policy “protects or covers the creditor’s interest.”

“Most people don’t realize that when they get into the policy,” said Laura Wagner, the Executive Director of the non-profit Floridians for Honest Lending. “That’s probably one of the worst scenarios you can get into, especially since we have Hurricane season again.”

Wagner urges consumers to avoid this type of force-placed insurance and instead try to find a policy with a private company or the state-backed Citizens Insurance.

“Force-placed policies are always more expensive, just by the nature of them. So, the rates for them are higher than a regular policy. So, you’re getting less coverage for a higher rate,” Wagner said.

Kowalczyk has hired an attorney and a public adjuster.

But she’s found her ability to challenge the insurance policy through courts or mediation has been lacking.

“There’s nothing they can do. I even talked to the public adjusters, who were very nice, they said they can’t do anything. So, I’m stuck,” Kowalczyk said.

 This year, state lawmakers passed new regulations which will crack down on the practice of force-placed insurance.

Wagner says the changes will help consumers; however she still recommends this type of insurance.

As for Kowalczyk, “I pray every day about it. I know that something will work out, but it’s still hard.”