When to contact your insurance partner? Say you’ve refinanced or paid off your home, or the lender has informed you that your mortgage has been sold to another lender. Maybe your life or your family has changed in some major way.
It’s easy to assume that, within that blizzard of paperwork, everyone who needs to know about the change has been informed, or will be. Doesn’t all of your information automatically “flow through” to everyone who needs to know?
Often it should, and often it does. But if some overworked administrative assistant six states away neglects to forward your information, the onus and liability doesn’t land on him or her. It lands on you.
You don’t have to send your insurance company a birthday card. But there are five life-changing occasions where it’s critical to keep your insurance partner informed.
When to Contact Your Insurance Partner
- Sale of your mortgage. Typically, you’ll receive a letter from your bank/lender that your mortgage has been sold to another lender. The old and new lender should inform your insurance company, but this sometimes gets lost in the shuffle. If your insurance company isn’t informed, you might receive a threatening-sounding letter from the new mortgage holder that it intends to purchase expensive insurance (that you’ll pay for) to protect its investment. This force-placed, or bank-placed, insurance is designed to protect the lender, not you.
- Mortgage refinance. While your insurance company typically provides proof of coverage at this time, things sometimes slip through the cracks.
- Mortgage pay-off. This is especially critical if your insurance is paid out of escrow, which is generally the case, rather than billed directly to you. You don’t want your insurance to lapse because you didn’t pay a bill you never received (because no one knew to send it to you).
- Other mortgage and/or deed changes. If someone on the deed or mortgage changes his/her name because of marriage, divorce or some other reason, notify the insurance company.
- Family/Life changes. Major life changes, such as the death of a spouse, also warrant a call to your insurance partner. Other examples: Parents die and leave a home to their children (or other heirs) or a second cousin moves in and starts paying rent. Transferring ownership of the property to a trust also warrants a call.
These changes won’t necessarily affect your premium (although they could). And in some cases, your insurance company will allow a reasonable grace period. If your spouse dies, you don’t have to inform your insurance company the day of the funeral.
To avoid issues with potential claims or liability, contact your insurance partner in a timely manner if any of the above events occur. Please note that this list is by no means exhaustive. When in doubt, let your insurance company know.
We hope you found this article on when to contact your insurance partner helpful. If you have any questions about when to contact your insurance company or broker and how that can affect your homeowners insurance, or would like a free insurance review, please call us at 877-576-5200.