How to Change Your Mortgage-paid Homeowners Insurance

Having the right homeowners insurance is a critical element of responsible homeownership. However, over the years, the best available coverage options may change, often well before your mortgage has been paid off.

Fortunately, changing your homeowners insurance when it’s paid through your mortgage, such as via an escrow account, can be a relatively straightforward process.

Five Key Steps to Change Your Mortgage-paid Homeowners Insurance

As you explore different coverage options and consider changing your insurance, consider the following steps to ensure a smooth transition:

1. Review your existing insurance. Start by examining your existing homeowners insurance policy. Note the coverage details, annual premium, and deductible. This information will be crucial when comparing new policies. Also, check for any early cancellation fees that might apply if you switch before your current policy term ends.
2. Shop around. Next, gather quotes from multiple insurance providers. Compare the coverage options, premiums, and customer reviews to find a policy that best suits your needs. Ensure the new policy offers at least the same level of coverage as your current one to avoid any gaps. Consulting your insurance broker can be vital during this step.
3. Finalize your new policy. Once you’ve selected a new insurance provider, purchase the policy. Make sure the start date of the new policy aligns with the cancellation date of your old policy to prevent any lapse in coverage.
4. Notify your lender. Inform your mortgage lender about the change. Provide them with the details of your new insurance policy, including the policy number and the insurance company’s contact information. This step is crucial because your lender needs to update the escrow account to reflect the new insurance provider.
5. Cancel your previous coverage. After your new policy is in place, contact your old insurance company to cancel the existing policy. Request a written confirmation of the cancellation. If you’ve paid your premiums in advance, request a refund for any unused portion.

We’re Here to Help

Contact the M.L. Ruberton Agency today to learn more about this process and ensure you maintain ideal coverage at optimal rates.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.