Can a lender add insurance if I already have it?
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The short answer:
You have a strong basis to escalate this matter. If your proof of insurance was valid and submitted before the forced-placed policy started, and the loan was extended without notice, this may involve unfair lending practices and violations of consumer protection laws. Filing a complaint with regulators or pursuing legal action could result in reimbursement or correction of your loan balance.
The long answer:
If informal complaints aren’t going anywhere and you're being held to pay interest on insurance that shouldn't have been added, a lawyer can help you formally dispute the charges and possibly recover damages. Especially since your loan was extended without notice, that raises red flags under truth-in-lending rules and state contract law.
Lenders can impose force-placed insurance if there's a lapse, but they’re required to send advance written notice and allow time to correct the issue. Since you say the policy was imposed before you received notice, and your proof was already submitted, that could be improper.
Loan terms can't be changed without your knowledge and consent. “The computer did it” is not a valid excuse if they failed to send a new contract or amendment and did not notify you of the change.
If the insurance was added improperly, any interest stemming from that charge is also suspect. Keeping documentation of when you submitted your policy and how they responded is key here. You can escalate this to your state financial regulator or the NCUA (if it’s a federal credit union), and also consider submitting a CFPB complaint.
You can file a complaint with the Consumer Financial Protection Bureau here: www.consumerfinance.gov
If that doesn’t resolve it, a consumer law attorney can send a demand letter or help initiate a claim for reimbursement and correction of your account.
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Do I need a lawyer? I submitted a complaint against a credit union regarding improper loan practices, including the imposition of forced-placed insurance and extension of my loan. I refinanced my loan and provided proof of insurance, including the name and policy number, through signed documentation. However, they added forced-placed insurance to my loan, totaling $5,651, despite already possessing proof of coverage. While a rebate of $2,300 was issued, I was still charged interest on the insurance—to the tune of $11,400.
I successfully completed payments on my loan in March 2025, fulfilling the contract. I have since been informed that my loan term has been extended without knowledge or any notice, and I am being required to continue making payments until an additional $11,400 is paid.
I understand how frustrating this situation must be for you. Have you already received any responses from the credit union regarding your complaint?
I have been talking to someone, but we are not getting anywhere.
Have you kept a record of all communications and documentation related to your loan and the forced-placed insurance?
Yes
Is there anything else the lawyer should know before I connect you? Rest assured they’ll be able to help with your loan dispute.
Yes
Hello! My name is Michael, and I'm an attorney ready to help! Your responses matter to me, so I only need a few minutes to review and respond to each of your posts.
Did the credit union ever provide written notice or explanation for why the forced-placed insurance was added or why your loan term was extended?
There was written notice provided for the insurance, and I provided them with the policy, but they said the proof was not sufficient. They also imposed the insurance before the notice I received. As far as the extension—no notice was provided.
I was told the computer did it automatically.
Ok, thanks! Just a few more questions.
Did they ever explain why your proof of insurance was considered insufficient, and do you have documentation showing when you submitted it compared to when the force-placed policy started?
They said because they couldn’t confirm coverage with the insurance company, and yes, when I refinanced the loan I signed an agreement to provide insurance with the policy listed on the agreement.
Understood! So you're just wondering what it is you can do here, correct?
Yes
Ok! Did you need to tell me anything else? If not, I can start with answering your question.
I don’t think so.
Ok! I just need a little time to draft up a high-quality answer. I'll be with you as soon as possible. It won't be terribly long, ok?
Ok
I'm so sorry about this situation! I want to address your situation with a detailed response, so if you have any questions, don’t hesitate to ask—because this law stuff can get complicated.
The short answer:
You have a strong basis to escalate this matter. If your proof of insurance was valid and submitted before the forced-placed policy started, and the loan was extended without notice, this may involve unfair lending practices and violations of consumer protection laws. Filing a complaint with regulators or pursuing legal action could result in reimbursement or correction of your loan balance.
The long answer:
If informal complaints aren’t going anywhere and you're being held to pay interest on insurance that shouldn't have been added, a lawyer can help you formally dispute the charges and possibly recover damages. Especially since your loan was extended without notice, that raises red flags under truth-in-lending rules and state contract law.
Lenders can impose force-placed insurance if there's a lapse, but they’re required to send advance written notice and allow time to correct the issue. Since you say the policy was imposed before you received notice, and your proof was already submitted, that could be improper.
Loan terms can't be changed without your knowledge and consent. “The computer did it” is not a valid excuse if they failed to send a new contract or amendment and did not notify you of the change.
If the insurance was added improperly, any interest stemming from that charge is also suspect. Keeping documentation of when you submitted your policy and how they responded is key here. You can escalate this to your state financial regulator or the NCUA (if it’s a federal credit union), and also consider submitting a CFPB complaint.
You can file a complaint with the Consumer Financial Protection Bureau here: www.consumerfinance.gov
If that doesn’t resolve it, a consumer law attorney can send a demand letter or help initiate a claim for reimbursement and correction of your account.
The complaint I submitted was with the CFPB.
Got it. Then you have a few other options.
A complaint with the FTC can be filed starting here: consumer.ftc.gov
You can also file a complaint with the government for credit unions here: www.mycreditunion.gov
Ok. What kind of attorney should I seek?
Sure thing! One who practices consumer protection law.
Try these links:
Sometimes local law schools also provide free legal assistance. Yelp can be surprisingly good for finding lawyers too.
Ok, thank you.
For sure! Did I thoroughly address your question? Did I provide top-tier service to you? If the answer is no to either, please let me know so I can help!
Did you have any other questions for me about this? Were there any concerns you still needed addressed?
