Do I have to notify my insurance company if my mortgagee changes?

How many times have you heard of banks buying out other banks, changing their name, or selling borrower’s loans to other banks? Probably pretty often! You may have gotten a letter in the mail to notify you of such a change.

How many times do you think said banks contact your insurance agent or company to inform them of a change? Hardly ever. In fact, almost never!

What can happen if the insurance company is not aware of a change of mortgagee? Especially when your mortgage company pays your insurance premiums out of escrow? Your insurance could possibly cancel for non-payment of premium!

As the insured, you need to keep your insurance agent up to date with information about any changes of banks (for example, if you received a letter that your loan has been sold to another bank), if you have recently refinanced with a different bank, or even if there has been a change in your bank’s address.

If your homeowner’s insurance premium is 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 likely just 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.

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.

Questions about your homeowner’s insurance policy or how your account is set up for billing? Reach out to us today! We’d be happy to help.