Force-placed insurance
Insurance a lender buys on its own and charges to the borrower when the borrower's required coverage lapses; often more costly and narrower.
Published May 31, 2026
Force-placed insurance — also called lender-placed insurance — is coverage a lender buys on its own and charges back to the borrower when the borrower's required insurance lapses or cannot be verified. It commonly arises with a chattel loan or mortgage that requires the borrower to keep the home insured.
The catch is that force-placed coverage tends to be more expensive than a policy the borrower would buy directly, and it usually protects the lender's interest rather than the borrower's — it may cover the structure but not the resident's belongings or liability. The added premium is typically added to the loan balance or monthly payment.
Force-placed insurance is generally avoidable by keeping the required coverage in place and giving the lender proof of it. The specifics are governed by the loan agreement and by state insurance and lending law.
This is general information, not legal or financial advice.