Thousands of Mass. Homeowners Getting Refunds After Homeowners Insurance Settlement

(WHDH) — Some Massachusetts homeowners were billed for property insurance they didn’t need. Now, thousands of residents are getting big payouts, and the Massachusetts Attorney General is warning other homeowners to be on guard.

“I have lived in this house probably all my life,” said Charlene Sheehan of her little piece of Lynn.

But a few years ago, a strange letter arrived.

“I did get a notice in the mail telling me that I didn’t have insurance, which I knew I had insurance,” Sheehan said.

She said she made sure that her homeowners insurance policy was active, and never gave it another thought.

“How can they bill me for insurance when I already have insurance?” Sheehan asked.

Then, last week, a letter showed up in the mail, with a check for $976 attached to it.

“My first reaction is, ‘This can’t be real. This has got to be fake,’” Sheehan said.

But it was very real.

The refunds are coming from Assurant, which writes and monitors insurance policies for mortgage companies. The Massachusetts Attorney General’s Office said the company mistakenly bought higher-priced property insurance, known as force-placed insurance, for homeowners who already had their own.

“Basically, customers being charged for insurance they did not need – insurance that was absolutely unnecessary,” said Massachusetts Attorney General Maura Healey. “Often times, this extra insurance, not only was it unnecessary, but it was also two or three times more expensive than their existing homeowners insurance policy.”

Assurant didn’t bill the homeowners directly. It charged the mortgage servicers, which then covered the costs using the homeowners’ escrow accounts.

That made the insurance premiums hard to spot.

“Many of these customers wouldn’t have even known that they were overcharged,” Healey said.

The Attorney General’s Office reached a settlement with Assurant in 2015, and then conducted an audit to determine how many homeowners were owed refunds. It found a total of 4,500 homeowners in our state who were owed a total of $6.3 million.

The office is now sending out those refund checks – along with some advice for all homeowners.

“When you see something and it looks funny, a lot of times, it may be funny, and it may be an unjustified charge,” Healey said. “I think it’s important that you understand what each line of that policy means, and when you have questions, make sure that you ask them.”

Sheehan said she’ll certainly be looking more closely at her bills.

“I never did before. I will now,” Sheehan said, with a laugh.

Assurant told 7NEWS that it cooperated with the Attorney General’s inquiry, and is pleased to have reached a resolution. It neither admitted nor denied any wrongdoing as part of the settlement.

In addition to the settlement with Assurant, Healey’s office has also settled with two other companies related to their force-placed insurance practices. In April, Healey also sued a fourth company over what she calls its force-placed insurance abuses, among other issues.

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