Class action suit accuses Travelers Insurance of inflating homeowner premiums

Consumers who bought homeowners insurance from Travelers Property Casualty Corp. are allegedly routinely sold excess coverage because the company misstates its risk estimates for physical damage, according to a class action suit filed in a New Jersey federal court.

Spotted on Law.com Radar: Instead of basing a policy’s dwelling liability limit solely on the risk of physical damage to the home, Travelers allegedly inflates that limit with the estimated cost of debris-removal expense that may be incurred, and the company does not inform the policyholder of that fact, according to the suit.

Travelers policies already provide debris-removal expense coverage sufficient for a policyholder’s needs, without increasing the liability limit to account for such expenses and without charging an additional premium, the suit claimed.