Lawsuit Accuses Lloyd's of London of Hawaiian Home Insurance Scam – NMP
Industry News

Lawsuit Accuses Lloyd's of London of Hawaiian Home Insurance Scam

Jan 10, 2019
The Aloha State is in danger of saying “aloha” to housing unless a new wave of units comes to the market

 
 
A federal class action lawsuit has been filed that accuses Lloyd’s of London and its affiliated insurance brokers of steering Hawaiian homeowners away from the home insurance program established by the State of Hawaii.
 
According to a statement issued by the firm Scott+Scott Attorneys at Law LLP, the lawsuit alleges that Lloyd’s deceived Hawaiian homeowners “into purchasing Lloyd’s surplus lines homeowner’s insurance to insure their homes against peril. These Lloyd’s surplus lines insurance policies, which contained numerous exclusions, including a Lava Exclusion, are essentially worthless—amounting to no coverage at all.”
 
Scott+Scott noted that surplus lines insurance policies are made available only when no other home insurance coverage is available. The lawsuit claimed that Lloyd’s and its agents knew that homeowners could have qualified for insurance form the Hawaiian Property Insurance Association (HPIA), but the company pursue a strategy of “artificially inflating coverage limits beyond the $350,000 dwelling coverage limit offered through HPIA.”
 
The 60-page lawsuit added that these actions resulted in commissions that were “directly tied to the amount of premium steered to Lloyd’s, thereby incentivizing the Broker Defendants to maximize the amount of surplus lines insurance placed with Lloyd’s.” Lloyd’s did not publicly comment on the lawsuit.
About the author
Phil Hall
Link copied
Published
Jan 10, 2019
Get the NMP Daily
Military Lending
Repeat Buyers Make Up Nearly 60% Of VA Purchase Business

VA's latest reminder about reusable benefits highlights an opportunity for originators to revisit past clients — and understand the rules around remaining entitlement

Veterans who have already used their VA home loan benefit aren't a niche segment of the VA purchase market. They're the majority.Nearly 60% of VA purchase loans in the latest full fiscal-year data went to previous homebuyers, a figure that takes on new relevance after the De...

Continue reading
Wholesale
UWM Combines Processing And Underwriting In Push For Faster Closings

Underwriting+ combines processing, underwriting, and borrower communication, with UWM reporting an 8.3-day average from submission to clear-to-close during its pilot

United Wholesale Mortgage is expanding the role of its underwriters, putting them in charge of work that traditionally moves among processors, underwriters, and other operations staff.UWM on Wednesday launched Underwriting+, a new program that assigns an underwriter to not o...

Continue reading
Renew your NMLS License — for free.

Enjoy access to a free NMLS renewal class when you attend an in-person event.

Find an event
More from
Industry News
CHLA: More Freddie Mac MBS Buying Could Narrow Mortgage Spreads

Trade group estimates greater Freddie participation could compress spreads another 10 to 12 basis points as Fannie has taken the lead in GSE mortgage-bond buying

Industry News
Sep 23, 2026
Early Loan-Limit Race Splits Into Three Tiers

Lenders are now offering $845,000, $847,440, or $850,000 before FHFA sets the official 2027 limits

Industry News
Sep 23, 2026
Better, Garg Clash Over Claimed 46% Shareholder Support

Better disputes its former CEO’s preliminary consent count as the two sides trade accusations and an Oct. 2 target date approaches

C-Suite Strategies
Sep 23, 2026
Fannie Changes How Rent From A Former Home Counts

Fannie now prohibits leases for departing residences and permits market-analysis tools instead of Form 1007, creating a key documentation difference from Freddie Mac

Regulation and Compliance
Sep 22, 2026
MPF Expands Eligibility For Manufactured And Renovation Loans

The Mortgage Partnership Finance Program has expanded MPF Traditional eligibility for affordable loans, manufactured homes, renovations, and lender-funded assistance

Industry News
Sep 22, 2026
Fed Hike Raises HELOC Costs While Mortgage Rates Stay Near 7%

Prime rose to 7% while the 10-year Treasury remained near 5%, giving originators two different borrower conversations

Industry News
Sep 17, 2026