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Confirmed - Want to Change Homeowners Insurance

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    Confirmed - Want to Change Homeowners Insurance

    Hi, I want to switch my homeowners insurance policy. Its currently being escrowed through my mortgage and of course my mortgage is in the bankruptcy. Has anyone ever changed their policy before? I've never done it and I have the quote and everything is ready to go... I'm just not sure how that stuff gets handled? The insurance company just sets it all up with the bank right? Or will there be some sort of push back on the mortgage company since my mortgage is in the BK?

    #2
    We have changed our homeowners insurance company twice since filing chapter 13 a little over four years ago. All we did was provide the new policy information to our mortgage holder at least thirty days before the effective date of the new policy. The new insurance company sent a statement to the mortgage company so the premium could be paid from the escrow account. It was a seamless process on both occasions.
    Petition 7-7-2015/Discharged 8-28-2020

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      #3
      Oh that doesn't sound bad... my premium is going to go down like 1k a year and I was nervous that this would somehow trigger the trustee to be like ooooooo more money to snatch.

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        #4
        Since filing in 2015. we have been required to file an updated annual income and expense document with the court. So far, our monthly payment has not changed because our increase in annual income is offset by higher food prices, health insurance, property taxes, home maintenance costs and etc. If you are also required to file an annual income/expense report the $1,000 you are saving by changing insurance companies can probably be offset (depending on an increase in income) by rising costs in expenses.
        Petition 7-7-2015/Discharged 8-28-2020

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          #5
          Oh ok, no I don't have to file anything with the court from now on unless I need to modify my plan or let them know about extra income etc... I was just trying to penny pinch as much as possible and our home insurance is actually way overpriced. I don't have to give them my tax refunds or bonuses or anything either.

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            #6
            So, FYI I went ahead and changed it... my current company said that the money for the policy will come back to me directly and then my new policy is being set up the same way on escrow. So, I'm trying to figure out how my mortgage company is going to handle that... my insurance is usually paid in full when it renews from my escrow account... so it was just paid in August and my escrow doesn't have the money to pay for the new policy. I also don't know how long its going to take for liberty mutual to refund me the policy money... will my current mortgage company just front me the new policy payment and let the escrow go negative until I send them the difference?

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              #7
              My suggestion is to send the money you receive back from the former insurance company to your mortgage company. Mortgage companies usually perform an annual escrow analysis to determine if the proper amount of money is being put into the escrow account to cover insurance and real estate taxes. If the analysis shows there will be a surplus of funds in the escrow account the overage is refunded to the homeowner. However, if the analysis shows there will be a shortage of funds, the mortgage company sends notice of the anticipated shortage and offers different remedies such as the homeowner paying the shortage in full or increasing monthly mortgage payments to spread the shortage out to ensure full funding is available. There is a certain percentage of funds that is required to always be in the escrow account. Hopefully, your former insurance company will send the refund quickly and your mortgage company will work with you. It is probably a good idea to contact your mortgage company and tell them the situation so they can tell you how they are able to assist you in this transition.
              Last edited by muneco; 11-12-2019, 05:49 PM.
              Petition 7-7-2015/Discharged 8-28-2020

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                #8
                Thank you! I did break down and call Navy Federal last night... I was hesitant to call them cause I didn't know if they were gonna refuse to talk to me because of the bankruptcy. Nothing was mentioned about my BK though so that was nice. Just for anyone else that attempts to do this, figured I'd close the loop on my question... they told me not to worry about it. They will take my escrow account negative to pay the new policy and then it should trigger an out of cycle escrow review. She said I should have a month or two of grace before anything on my mortgage changes. My current policy just renewed in August, so I should be getting a refund of like 2,600 ish bucks. The new policy only costs 2500 a year vs. what I'm paying now at 3,500. So, hopefully it will all wash out to me having to pay less per month on my mortgage? It may take awhile for that to shake out though. Liberty Mutual said they would mail me my funds within like 7-10 days. So, yea I guess I was a little freaked out for nothing.

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