Consumer complaint received 2024-10-25 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: WELLS FARGO & COMPANY
State: CA

Complaint narrative:
I am filing a complaint regarding XXXX XXXX handling of a homeowners insurance lapse on my property, which stemmed from my insurer, XXXX XXXX, exiting the XXXX  market without notifying me. My policy, managed through XXXX as the broker, was set up for automatic payments, and I believed that my homeowners insurance was active given the ongoing deductions from my account alongside my auto insurance payments with XXXX. However, XXXX withdrew from California without providing written or electronic notice to customers, resulting in a lapse of my homeowners insurance for over a year. 

I only became aware of the issue in XX/XX/XXXX when Wells Fargo notified me of the lapse, requesting proof of homeowners insurance for the period of XX/XX/XXXX to XX/XX/XXXX. Up until this point, XXXX XXXX communications regarding homeowners insurance had focused solely on XX/XX/XXXX onward, neglecting to notify me in advance of the XXXX lapse. 

Key Issues with Wells XXXX Practices : Delayed Notification : Wells Fargo failed to inform me of the XXXX insurance lapse until over a year had passed. This delay prevented me from obtaining affordable alternative coverage and ultimately led to Wells Fargo enforcing a high-cost forced-placed insurance policy. 

Forced-Placed Insurance via Wells Fargo XXXX XXXX Wells Fargo XXXX XXXX backdated, forced-placed insurance policy through XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX a Wells Fargo affiliate, XXXX only the period from XX/XX/XXXX, to XX/XX/XXXX. This left an uncovered period from XX/XX/XXXX, to XX/XX/XXXX, while Wells Fargo still demanded payment for backdated coverage. Additionally, this forced-placed policy was priced at a much higher premium. If Wells Fargo indeed uses a subsidiary to provide this backdated insurance, it raises concerns about a potential conflict of interest, suggesting a process that might incentivize delays in notifying customers of lapses. This approach restricts customers from securing alternative coverage, effectively funneling additional funds back to Wells Fargo through XXXX policies. 

Failure to Verify Insurance and Misleading Information : When I reached out to Wells Fargo to explain that the lapse resulted from Stillwaters failure to notify both myself and Wells Fargo, they insisted there was nothing they could do. Wells Fargo stated that it is the homeowner 's responsibility to provide proof of coverage, yet they claim not to have effective processes for monitoring insurance policies, as they maintain that customer notification or insurance company verification is the only means available. Wells Fargo further inaccurately asserted that I am legally required to maintain homeowners insurance, which is misleading. 

Conflict of XXXX in XXXX XXXX : By delaying notification to customers regarding insurance lapses, Wells Fargo enables a process that maximizes backdated insurance policies under their own subsidiary, thereby raising premiums. XXXX XXXX practices appear to serve their interests at the expense of customer well-being, as they can wait until after a policy lapses to implement costly forced-placed insurance and profit from the high premiums paid back to their own subsidiary. 

XXXX Sought : Investigation of XXXX XXXX XXXX Insurance Practices : Specifically, I request a review of Wells Fargos use of a subsidiary for forced-placed, backdated insurance to determine if this arrangement places customers at a disadvantage and lacks proper customer notification practices. 

Refund of Excessive Premiums Charged : Wells Fargo should cancel or refund premiums associated with this forced-placed policy, as the lapse was the result of inadequate communication from XXXX and XXXX XXXX XXXX XXXX. 
Improvement of Notification Processes : Wells Fargo should establish prompt notification protocols to alert customers of coverage lapses and allow reasonable time to secure alternative insurance. 

Thank you for reviewing this matter. I hope this complaint prompts an inquiry into XXXX XXXX forced-placed insurance practices, ensuring consumer protection and transparency.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation