American Modern Insurance Group will pay $1 million for allegedly overcharging Minnesota residents for lender-placed insurance (LPI).
As per a settlement with the Minnesota Commerce Department, American Modern will also cut its LPI rates by 43% and provide refunds to the affected homeowners.
An investigation by the Minnesota Commerce Department found that American Modern charged excessive rates in a non-competitive market for LPI and submitted inaccurate information in support of its rates.
The alleged overcharging took place from at least Jan. 1, 2008, to March 22 of this year and involved nearly 7,000 policies, the Minnesota Commerce Department says in a release.
“The Commerce Department investigation found that, for years, American Modern charged excessive rates to Minnesota homeowners who were forced to buy its policies,” says Mike Rothman, commissioner of the Minnesota Commerce Department, in a statement. “This settlement will provide refunds to Minnesotans who were overcharged in the past while protecting consumers against unfair and costly insurance practices in the future.”
Homeowners who were overcharged or improperly charged for LPI policies can submit a claim for a refund. Claim forms will be mailed later this year to Minnesota residents who had policies issues by American Modern during the 2008-2016 period, Rothman’s office says.