How many times do you think they contact your insurance agent or company? Not very often.
What can happen if the insurance company is not aware of a change of mortgagee? Your insurance could possibly cancel for non-payment of premium.
What should you do as the insured? Give your agent a call to let them know if there have been any changes of banks, a refinance, or even a change in your bank’s address.
Most Homeowner’s Insurance Policies are set up to be paid by the mortgagee. The payments are escrowed, which means that part of your monthly mortgage payment is set aside to pay this bill. When the policy renews, the company will send an invoice to the mortgagee that is on the policy. If this has changed, the “old” mortgagee will not send this invoice to the “new” mortgagee – it gets tossed in the trash. The next thing that happens is that you are getting a notice of pending cancellation for non-payment of premium which of course can be very unsettling.
So, the bottom line is that if you, the insured, can confirm that we, your agent, have the correct mortgagee clause and loan number on your policy, we can work on avoiding any problems with payment of the premium.
Contact us with any insurance questions, we'd love to get in touch! Or read up some more about insurance in our blogs!
-Homeowners Insurance Claims Hints
-DP3 vs. HO3 Homeowners Policies