Centennial Force-Placed Flood and Hazard Insurance Class Action

Plaintiff Simeon Penton bought a condominium in Florida, which he financed with a mortgage eventually assigned to Centennial Bank. The complaint for this class action claims that Centennial wrongly force-placed insurance on the property, first through Overby-Seawell Company (OSC) and later through Great American Insurance Company. 

Two classes have been proposed for this action. 

  • The Nationwide Class is all borrowers who, during the statute of limitations, were charged by Centennial or its affiliates for a force-placed hazard or flood insurance policy on a US property where the amount of the insurance exceeded the insurable value of the structure.
  • The Florida Class is all borrowers from the Nationwide Class whose properties are in the state of Florida. 

When a borrower takes out a mortgage on a property, that borrower must insure the property, so that the lender does not suffer an excessive loss if the property is damaged or destroyed. If the borrower does not maintain the insurance, or if the insurance is insufficient, the lender may force-place insurance, charging the borrower for the premiums. 

In this case, plaintiff Penton claims that he had flood insurance through his property’s condominium association his insurance was sufficient.

The National Flood Insurance Program (NFIP) requires that flood insurance be maintained on properties in certain areas if the properties are collateral for a mortgage. However, there are limits on the amount of insurance coverage required: It must be “at least equal to the lesser of the outstanding principle balance of the designated loan or the maximum limit of coverage available for the particular type of property…” And the NFIP does not insure land: “Flood insurance coverage under the NFIP is limited to the overall value of the property securing the designated loan minus the value of the land on which the property is located.”

In February 2010, Penton refinanced his mortgage with a loan for $191,424.43. What he did not know at the time, the complaint says, is that by that time the property had been valued at only $160,000; and later, it was valued at only $98,000. 

The condo association provided hazard insurance plus $125,000 in flood insurance on the property. However, beginning in 2011, Centennial began force-placing flood and hazard insurance on the property. They did this, the complaint says, because they calculated the flood insurance needed based on the total amount of the mortgage or the total replacement value of the property, without subtracting the value of the land. 

At least once, Penton was able to have the policy cancelled, but Centennial has continued to place them and charge him. He claims that Centennial has now force-placed eleven policies on his property. He also claims that Centennial gets a kickback from the premiums and therefore has a vested interest in maintaining them. 

The complaint claims that Centennial and the insurance companies breached contracts, unjustly enriched themselves, and violated federal and state laws. 

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Centennial Force-Placed Flood and Hazard Insurance Complaint

October 1, 2018

Plaintiff Simeon Penton bought a condominium in Florida, which he financed with a mortgage eventually assigned to Centennial Bank. The complaint for this class action claims that Centennial wrongly decided that he did not have enough flood or hazard insurance and force-placed insurance on the property, first through Overby-Seawell Company (OSC) and later through Great American Insurance Company. 

cedntral_bank_insurance_complaint.pdf

Case Event History

Centennial Force-Placed Flood and Hazard Insurance Complaint

October 1, 2018

Plaintiff Simeon Penton bought a condominium in Florida, which he financed with a mortgage eventually assigned to Centennial Bank. The complaint for this class action claims that Centennial wrongly decided that he did not have enough flood or hazard insurance and force-placed insurance on the property, first through Overby-Seawell Company (OSC) and later through Great American Insurance Company. 

cedntral_bank_insurance_complaint.pdf
Tags: Deceptive Insurance Practices, Forced Placed Insurance, Insurance