My lender "sent a payment" 20 days ago to my insurance, insurance company did not receive it, my policy was canceled 4 days ago, and only today am I receiving notice of the cancellation. Called insurance and they said not their fault, call the lender. Called my lender and they said they have to investigate if the check they sent has been deposited, and send another if it hasn't. I asked if they could speed this up or pay immediately, they said no because I don't have enough money in my escrow account. I'm getting concerned I will have a lapse in coverage if this continues.
I understand that being idealistic here in who bears the burden for what means nothing to these two corporate behemoths. But at the very least is there a way to get them in direct contact so I'm not mediating the situation?
Homeowners insurance policy canceled after lender failed to pay
byu/jimmyjlf inInsurance
Posted by jimmyjlf
8 Comments
If there’s a loss while you wait, well, it’s unclear. I would pay the policy right now, and when your bank gets around to sending a check, the carrier will cash it and then turn around and send you the refund.
Isn’t this the whole point of escrow? Lenders make you escrow because they don’t trust you’ll make timely payments. And then they don’t make the payment.
There has to be some recourse for that? No?
I learned that lenders/banks that hold a lot of mortgages don’t just pay each customers policy one by one. They will take a whole bundle of customers and their policies with the same insurance company and similar due dates add up the amount due and write one large check. Send that in with a manifest of policies that are meant to be paid. On occasion errors happen. A page doesn’t print or a policy number gets mistyped or left off entirely. We had this happen to a customer a few years ago. Insurance company could see that there was an extra amount on one of these checks (just so happened to match exactly the premium our customer had) but the manifest was incomplete. After a lot of back and forth things got worked and the customer was reinstated with no lapse in coverage.
Pay it yourself and you’ll get reimbursed after mortgage pays.
I’m assuming you’re not in FL? FL has a 90-day grace period on mortgage billed policies. It’s law.
I’d check with your state first. I received a letter on Friday saying my policy would expire in a week. I called and insurance told me that even though my expiration date was 3/26/26, I still legally had 90 days past that date since it’s paid with escrow.
i mean….. it’s your policy. it’s ultimately up to you as the policy holder to make sure it’s paid on time. at least my company would have warned u it was pending cancel… i would pay it yourself ASAP as other said you’ll get the overpayment back anyway
My lender screwed up my insurance two years in a row. Last year I got a notice that the policy was going to lapse so I called them and they overnighted a check. But I was also prepared to pay electronically and be reimbursed if needed.
That was the final straw and I no longer escrow my insurance or taxes since the mortgage holder proved incompetent at paying the insurance on time.