My Account
If you’re paying off a mortgage, you might assume you’re locked into the home insurance policy you started with. Fortunately, that’s not the case. Even with an active loan, homeowners are free to change insurance providers, as long as specific steps are followed. Your insurance agent at Senz Insurance Agency Inc, serving Beloit, WI, explains:
Your Lender Cares About Coverage, Not the Company
Mortgage lenders require you to carry home insurance to protect their financial interest in the property, but they don’t require you to use a specific provider. What matters most is that the coverage remains active, meets the lender’s minimum requirements, and names them as a loss payee on the policy.
If you switch providers, you’ll need to inform your mortgage company and ensure your new insurer sends proof of coverage directly to them. Skipping this step could result in delays or the lender purchasing costly force-placed insurance on your behalf.
Timing and Escrow Account Coordination
If you pay for insurance through an escrow account, the transition requires a bit more coordination. First, confirm your new policy is active before canceling the old one. Then, notify your mortgage servicer so they can direct future escrow payments to the correct insurer.
In some cases, you may need to pay the new premium out of pocket and request a refund or adjustment once the escrow account is updated. While it takes a little extra effort, the long-term savings or improved coverage can make it worthwhile.
Freedom to Find Better Coverage
Switching providers mid-loan allows you to shop for better rates, improved coverage, or better customer service. Be sure to keep your lender informed throughout the process. A smooth transition protects both your property and your loan while giving you more control over your policy. Contact Senz Insurance Agency Inc., serving Beloit, WI, to learn more.
