Paying off your Mortgage!

| April 28, 2017
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What we our insurance agency doesn’t know can be a problem for you, the consumer.

Nearly everyone with a home has a mortgage. Since the bank is “part owner” of your home they must be named on your insurance policy as detailed in this article from Investopedia.com.

If you ever have a loss/claim, your name as well as the name of your mortgage company will appear on the claim check since you both have an insurable interest in the property.

However, it is not a problem unless your lender changes. Problems can then arise with your Escrowed Insurance Payment and your payment in the event of a claim. For more steps to follow when paying off your mortgage – click here.

  • Did you finally pay off your mortgage; congratulations! Be sure to let us know and we will REMOVE the Bank from your policy. If you do not, their name will still appear on any Claim Payment and you will have to work it out with them before you can cash your check and get your money.
  • Did the bank sell your mortgage to another bank? Once again, it’s important to let us know. If we have the wrong bank on a claim check, not only will you have get them to sign off, how fast do you think they will make that happen for someone who is no longer a customer of theirs?  This can create a real delay in getting your claim paid.
  • Do you Escrow your Insurance Payment? Very efficient.  If you pay off your mortgage, they will no longer be escrowing the Insurance payment and you will have to pay the bill directly. If your Mortgage is sold, the old bank will no longer “pay” your Insurance Bill and if the new company doesn’t have enough escrow funds built up, neither will they.  And it can be a struggle to get your “escrowed” money back from the old bank.  You may be stuck paying the bill to avoid a cancellation.

These are issues we see all the time and want to make you aware of them to head off problems.

If there are Any changes to your lender, please call John Andrade Insurance Agency, Inc.at 401-253-6542 and let us know who your new mortgage company is. We can take it from there to get your insurance policy corrected.

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