Class Says Morgan Chase Gouges on Insurance

MIAMI (CN) - JP Morgan Chase gouges homeowners for temporary insurance, a class action claims in Federal Court. The named plaintiffs say Chase charged $403 for 20 days coverage, which it bought from its own subsidiary or affiliate, American Security Insurance Co. That works out to $7,300 a year for coverage for which they were paying $500 annually. They claim more than 100,000 people could be affected.

The named plaintiffs claim their "non-windstorm" mortgage insurance lapsed for 20 days, and that the annual premium for it was about $500. They say Chase charged $403 for 20 days coverage, which it bought from its own subsidiary or affiliate, American Security Insurance Co. That works out to $7,300 a year - "almost 15 times the annualized premium ordinarily paid by Plaintiffs," according to the complaint.

Plaintiffs accuse Morgan Chase of self-dealing, profiteering, failing to seek competitive bids, breach of contract, unjust enrichment and unconscionable abuse. They are represented by Jeremy Alters with Alters, Boldt & Brown.

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