03/12/2026
Mortgage Math _x+/ - Changing Insurance Companies
Good Morning.
Homeowners Insurance Premiums are increasing at an consistent rate. In addition to trying to drop PMI, people are trying to improve payments by finding less expensive insurance.
If your insurance is escrowed, and you're changing"carriers" - there is a process. This must be followed -otherwise all hell will break loose.
1.) The Anniversary Date of your Original Insurance is always the original day you bought the house. Buy on April 10th, 2020 - that premium will always be due by April 10th.
2.) If you change companies, that new insurance is always effective on the date the new policy takes effect. Take out a new insurance policy on 11/01/2025, that new insurance is due every Nov 1st.
3.) IF you change carriers, the new insurance company is SUPPOSED to notify the old carrier of the cancelation. But it doesn't always happen. And it's never followed up on. I strongly recommend that you just assume it's not done and do it yourself.
4.) Call the old insurance company, advise of the new policy and advise of cancellation. At this point - you've already prepaid the old policy through - using our example - 4/10/26 - and you are owed a refund of whatever months are remaining. THIS IS MONEY TO YOU!
5.) Call the mortgage servicer, tell them the change. Provide a copy of the new binder; advise of the cancellation of old and MAKE SURE they adjust the dates and notify them of the new due dates and amount.
6.) If you take out a new policy, you will need to pay that premium in advance, just like when you closed. If you present it to the mortgage company to be paid out of the escrow account - they will think you have two policies. your payment will increase when they run the escrow analysis. The escrow account will go into the negative or it will read a shortfall, and your payment will increase to re-fill that 2.2 month buffer and the negative.
7.) If you plan on changing the insurance on the anniversary date of your closing, that will save some trouble BUT you will want to make that change 45 days before the old one is due. Notify the existing insurance that it's to be cancelled and not to forward to mortgage company for payment. Advise the servicer of the new insurance by providing them all of the info they need. Let the new insurance co. know that they can bill the company for that first years premium.
And of course, when changing insurance companies, you want to make sure that your coverages are all adequate. And your savings is not being made by skimping on coverage.
I learned everything about insurance from the insurance agents I work with. Any questions or help, I highly recommend Tim Dacri @ Cantiani Insurance. (508)791-2088 /
[email protected].
Best,
Cheryll LeBlanc
[email protected]
508.498.7570
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