Complaints against Bank of America (BOA) and insurance-related issues have been significant enough to result in a 2016 $3 million settlement for a case related to insurance claims. Numerous insurance-related concerns involving the financial giant have been mentioned in consumer complaint forums.
Delayed Release of Insurance Claim Funds
In several situations, after a consumer filed an insurance claim and the insurance company speedily approved the money, the claim check was held by Bank of America for an unreasonably long amount of time. The following real-life examples from Complaint Board represent a common pattern (there are dozens of more complaints just like it on public forums):
- September 2016: A homeowner had a broken pipe that ruined their ceiling and kitchen. Their insurance company released a check for almost $5,000, but Bank of America held onto the check and would not release it in a timely manner. This is the kind of problem that was addressed in the $3 million class action mentioned above.
- June 2016: A Bank of America customer who had hail damage on her home saw the numerous complaints online about how the bank holds claim checks for unreasonable amounts of time. To help prevent having the same problem, she went into a branch to have the check handled in-person. However, the bank would not let her handle the matter in-person. She was forced to mail in the check. As she feared, they held her check for a long time. She had great difficulty tracking it down and getting the funds released.
- April 2016: A homeowner in Texas had severe wind and hail damage. Bank of America held onto the insurance claims check for a long period of time. When the customer complained and made calls to amend the situation, Bank of America finally released some of the funds. However, they only released 25 percent of the claim payment. This small amount made it very difficult for the customer to find a contractor to do the repairs.
Similar problems are reported on other complaint forums, including a consumer who had severe roof damage but could only get a fraction of the money released from Bank of America in a timely manner.
BOA Flood Insurance Concerns
Another common customer complaint regarding Bank of America and insurance relates to the company's handling of flood insurance requirements. For example, some customer complaints report that the bank falsely claimed that their homes were located in a flood zone, incorrectly indicating that they were subject to mandatory flood insurance. The bank has also been accused of pushing customers to get certain flood insurance policies, then charging unusually high amounts for those policies.
Examples include:
- February 2015: A Bank of America customer complained that she was placed into a flood insurance policy that she did not authorize. She says this was done after years of receiving constant opt-out letter requirements from the bank.
- August 2009: A homeowner received a notice from Bank of America to get flood insurance. When the homeowner went to local government officials to verify the claim that they were in a flood zone, it was proven false. Bank of America apparently did not offer any refunds for the premiums already paid by the homeowner.
In 2014, a class action lawsuit resulted in a $31 million settlement by Bank of America paid to customers who were required to get excessive flood insurance in situations where it was not needed. This abuse of flood insurance requirements is not unique to Bank of America, however. Several other banks were ensnared in a class action lawsuit for the same issue in 2013.
Unauthorized Third-Party Insurance
Customers have also complained frequently about Bank of America putting them into third-party life insurance policies that they did not authorize. In a typical example, a customer complaint detailed a situation in which Bank of America gave the customer's personal information to a third-party insurance company who signed up the customer for a policy that the customer says she did not authorize.
Make an Informed Decision
When looking at these accusations, it's easy to understand why people sometimes express cynicism about banking institutions. Bank of America is not the only financial institution with these kinds of allegations. U.S. Bank is one example of another bank with similar customer complaints. It's always worth it to research a financial institution's specific practices and customer reviews before opening an account or taking out a loan.
