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Changing homeowners insurance
Old 08-11-2020, 04:31 PM
  #1

We recently changed our homeowners insurance so that our car and house would both be covered by the same company. I canceled the old insurance and they sent us a refund. We got a bill from the new company today. When I had called the mortgage company to let them know about the change they said we would deposit the refund check and then send it to them. Well, now I am confused. Do I pay my new company and they will pay the mortgage company or do I send it directly to the mortgage company?? I will be calling the agent at my new company tomorrow, but I thought with the wealth of knowledge of my PT friends that someone might know the answer tonight. There is a big difference in the amount of the refund and the price of the new insurance, so I don't want to put all that into our escrow account if that is not necessary. We are fixing our leaking basement and that extra money would come in handy!!


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When I had a mortgage...
Old 08-11-2020, 06:57 PM
  #2

My bank needed proof of homeowner’s insurance. I always paid the premium separately. It never came out of escrow. Maybe all they need is a copy of the check to the new company so they know you are covered. Good luck.
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Old 08-12-2020, 03:52 AM
  #3

I think the agent at your new company would be the person to contact. Many years ago we had a mortgage with an escrow account, and funds from the account were used to pay for insurance and property taxes. We didn't like it, but our bank required it. We've since refinanced, and no longer have an escrow account.

My guess, for what it's worth, is that the mortgage company will require you to send them the refund, and they'll pay the insurance company. If additional payment is required, they'll ask you for it, and again, they'll handle the payment for the homeowner's portion.

I'm not sure any of us are fans of escrow accounts, but that's the way it is. It might be worth asking if you can get rid of yours and handle payments on your own, but I'm now sure they'll agree. There are plenty of mortgages out there that don't require an escrow account, and if you have enough equity, perhaps you could refinance.
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Old 08-12-2020, 04:09 AM
  #4

I don't mind the escrow because then I have 2 less bills I have to pay myself!

If your escrow is set up in your mortgage docs, I don't think you can just stop it without rewriting paperwork. If I wanted to keep part of the payment, I would deposit the check, and send whatever I owed to the new insurance company and the paperwork into the mortgage company. Let them pay it. They aren't going to need the rest UNLESS they need it to cover escrow balances.

If you send the whole check in, you should get a refund from the mortgage company because your escrow will be above what it needs to be, but it would be a while. I like the first option above.
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