In an effort to make things sound very simplistic, mortgage companies can leave out some important details about your role in your escrow account. They want you to understand that the escrow account will pay your insurance premium for you. Which it will. However, there are some things you need to do on your end to make sure this happens smoothly and on time. Today, we’ll go over the three times you need to contact the insurance company directly yourself.
Buying a home
When you purchase a home, you’ll be in communication with us to set up your insurance policy. We will send the mortgage company the documentation they need for closing on your behalf. If you are escrowing your insurance, they will send us the first annual premium amount. Often, within the first 30 days, the mortgage company sells your loan to a servicing company.
While a very small handful of companies also send us a letter, most do not. It’s always best if you call as soon as you receive the letter to update your account. This will prevent your premium from being late or even cancelled for non-payment in the event we’re still using old information for billing.
Refinancing a home
Just like a new purchase, the escrow portion of the refinance works exactly the same way. We will work with the mortgage company doing the refinance and submit the declarations page needed to get you closed. However, the loan is typically sold within the first 30 days, and a letter will be mailed to you.
More often than not, policyholders assume the mortgage company lets us know. Then ten months later, we’re invoicing the wrong place. In the unfortunate situation where the policy cancels or has a lapse in coverage, it will end up as your responsibility. The insurance contract is between the insurance company and you. The escrow account is simply paying your premium that they’ve been collecting from you, so they are not held responsible for cancellations.

Selling a home
When you sell a home, the mortgage company does not notify the insurance company. You will need to call us and let us know what day the home officially sold, and sign a cancellation request. Once the cancellation is processed, if there is any unused premium on the account, it will be mailed back to you in the form of a refund. If you choose to just let the policy expire, you will lose out on any unused premium the escrow account paid on your behalf.
If you have any additional questions on this topic, please email me at kaylagulick@tnsig.com If you’ve recently refinanced, you can also use that email to submit your new mortgagee clause and loan number. I will be happy to update the account for you.