Insurers must propose new rates for “force-placed” insurance, which is imposed by mortgage lenders when homeowners fail to maintain coverage on their homes, Gov. Andrew Cuomo announced Tuesday.
The premiums for force-placed insurance can be three to 10 times higher than for ordinary homeowner’s insurance, according to the state Department of Financial Services, which held hearings on the industry last month.
“The extra expense of force-placed insurance can push a family over the foreclosure cliff,” Cuomo said in a statement. “It’s our job to see that rates are priced fairly and homeowners are protected from paying more than what is fair.”
The order to propose new rates was sent to American Security Insurance Company, which is a unit of Assurant Specialty Property; QBE Insurance Corp. and American Modern Home Insurance Company. Those companies make up more than 90 percent of the force-placed insurance market in New York, according to the Department of Financial Services.
The insurers’ proposals for new rates are due by July 6.
Photo: Gov. Andrew M. Cuomo.