You may choose to change insurance companies at any time, but the procedure you follow will depend on whether you make this change mid-term (before the current policy expires), or when your current policy is up for renewal. Prior to changing carriers, contact the lender's Customer Service department for instructions. As a rule, the following will apply if you pay for insurance through the escrow account:
Changing Mid-Term: If the lender collects funds through escrow for your insurance and has already paid the premium for your current policy, the lender will not have funds to pay the new policy. In this situation, you must pay the premium for the new policy yourself and send the lender a copy of the new policy along with a paid receipt so we may update our system. You should also cancel the old insurance policy, and request a refund of any unused premium. When changing insurance companies, the effective date of the new policy must be the same as the cancellation date of the old policy, so there is no lapse in coverage.
Changing At Renewal: If the lender collects funds through escrow for your insurance and you wish to change insurance companies at the time your current policy comes up for renewal, the lender will pay the premium for the new policy from funds currently held in your escrow account. However, you must contact Customer Service at least one month prior to the renewal date to advise that you are changing companies, so the lender will not pay the renewal premium for your old policy. You must also make sure your agent sends the lender the premium billing for the new policy before the old policy expires. When changing insurance companies, the effective date of the new policy must be the same as the expiration date of the old policy, so there is no lapse in coverage.
If you pay your insurance direct and not through escrow, you may change carriers anytime and provide the lender with evidence of the revised insurance. Be sure the agent shows the Mortgage Clause for the lender on the new policy (see “What is a mortgagee clause” for information).
Contact your Loan Officer for further information.