Changing your home insurance when your mortgage includes an escrow account can seem daunting, but it doesn’t have to be. At TGS Insurance, we’re here to simplify the process for you. This guide will walk you through how to change home insurance with escrow, ensuring a smooth transition without disrupting your mortgage payments.
What Is an Escrow Account in Home Insurance?
An escrow account is a financial arrangement managed by your mortgage lender to cover expenses like home insurance premiums and property taxes. Each month, a portion of your mortgage payment goes into this account, and your lender uses it to pay your insurance and taxes on your behalf. When changing home insurance with escrow, you’ll need to coordinate with both your lender and your new insurance provider to avoid any gaps in coverage.
Why Change Your Home Insurance?
There are several reasons you might want to switch your home insurance policy, even with an escrow account in place:
- Better Rates: You may find a more affordable policy with the same or better coverage.
- Improved Coverage: A different provider might offer additional protections that better suit your needs.
- Customer Service: You might prefer a company with better customer support or claims handling.
- Life Changes: Updates like home renovations or changes in property value might require a new policy.
Whatever your reason, understanding how to change home insurance with escrow ensures the process goes smoothly.
Steps to Change Home Insurance with Escrow
Follow these steps to switch your home insurance policy while maintaining compliance with your escrow account requirements.
1. Research and Compare New Home Insurance Policies
Start by shopping for a new home insurance policy that meets your needs. Compare quotes from multiple providers to ensure you’re getting the best coverage at a competitive price. At TGS Insurance, we make this easy by offering personalized quotes tailored to your home and budget.
Make sure your new policy provides at least the same level of coverage as your current one, as your lender will likely require this to approve the change.
2. Contact Your Mortgage Lender
Before making any changes, notify your mortgage lender about your intent to switch insurance providers. Since they manage your escrow account, they’ll need to approve the new policy and update their records. Ask about their specific requirements, such as:
- Minimum coverage levels
- Documentation that they need from your new insurer
- The timeline for making the switch
Most lenders require a copy of your new policy’s declarations page to ensure it meets their standards.
3. Purchase Your New Home Insurance Policy
Once you’ve selected a new policy and confirmed it meets your lender’s requirements, purchase the policy. Ensure there’s no lapse in coverage by coordinating the start date of your new policy with the cancellation date of your old one. At TGS Insurance, we can help you time this transition seamlessly.
4. Notify Your Lender of the New Policy
Provide your lender with the necessary documentation for your new insurance policy. This typically includes:
- The declarations page of your new policy
- Proof of payment for the new premium
- Contact information for your new insurance provider
Your lender will update your escrow account to reflect the new premium amount. If your new premium is lower, you might see a reduction in your monthly mortgage payment. If it’s higher, your payment may increase slightly.
5. Cancel Your Old Home Insurance Policy
Contact your current insurance provider to cancel your old policy. Request written confirmation of the cancellation and share this with your lender to ensure all records are updated. Be sure to ask for a refund of any unused premiums, which may be sent to your lender to be deposited into your escrow account.
6. Monitor Your Escrow Account
After the switch, keep an eye on your escrow account to confirm that payments to your new insurance provider are being made on time. Your lender should provide an updated escrow statement reflecting the change. If you notice any discrepancies, reach out to your lender immediately to resolve them.
Tips for a Smooth Transition
- Avoid Coverage Gaps: Ensure your new policy starts before your old one ends to maintain continuous coverage, as required by your lender.
- Communicate Clearly: Keep open lines of communication with your lender, current insurer, and new insurer to avoid misunderstandings.
- Work with Experts: Partnering with an experienced insurance agency like TGS Insurance can streamline the process and ensure compliance with your lender’s requirements.
Common Questions About Changing Home Insurance with Escrow
Can I Change My Home Insurance at Any Time?
Yes, you can switch your home insurance policy at any time, but you’ll need to coordinate with your lender to ensure the transition aligns with their escrow payment schedule.
Will Changing My Insurance Affect My Mortgage Payment?
Possibly. If your new premium is different from your old one, your lender will adjust your monthly escrow payment accordingly.
How Long Does the Process Take?
The process typically takes a few weeks, depending on how quickly your lender processes the change and how soon you can secure a new policy.
Why Choose TGS Insurance for Your Home Insurance Needs?
At TGS Insurance, we understand the complexities of changing home insurance with escrow. Our team is here to guide you through every step, from finding the best policy to coordinating with your lender. With our expertise and commitment to customer satisfaction, you can trust us to make the process as smooth as possible.
Ready to switch your home insurance? Contact TGS Insurance today for a free, no-obligation quote and let us help you find the perfect coverage for your home.