Force Placed Insurance Law and Legal Definition

Force placed insurance is the insurance taken out by a creditor for an uninsured debtor on a property placed as collateral. This refers to the hazard insurance purchased by servicer on borrower’s home or property when policy purchased directly by borrower on non-escrow mortgage account has lapsed, or when servicer contends that borrower has failed to provide proof of insurance coverage, or when account is in default. This is a general liability insurance for residential and commercial properties and foreclosed properties.