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Tuesday, April 23, 2013

Mortgage Companies and Insurance Companies Go Together Like Peanut Butter and Jelly


Mortgage Companies & Insurance Companies go together like peanut butter and jelly…you usually can’t have one without the other. They rely on each other, and when a good line of communication is formed between the two, it’s smooth sailing for their mutual customers, but if some things get lost in translation then the customer suffers. L

Here are some useful tips for the consumer who has a home mortgage.

1.Tis the Season for re-financing
Mortgage Companies want Insurance Companies to provide proof of insurance listing this new mortgage prior to the closing of the financing. It is a logical request in some ways, but what if the financing falls through for some reason or another? It is not the mortgage company’s (who didn’t get your business) responsibility to contact the insurance company, it then becomes the consumer’s responsibility.

BAD NEWS: If your mortgage clause is changed on your policy, and your refinance does not go through, and you do not notify your insurance company, then your insurance billing will be misdirected if your policy is paid via escrow, and this puts your policy in danger of lapsing for non-payment. L

GOOD NEWS: If your loan refinance does not go through, notify your Trusted Choice insurance agent so the policy can be corrected. J

2. Economic blues have many mortgage companies selling your mortgage to another entity.
BAD NEWS: If your insurance is escrow paid, and your insurance company is not aware your mortgage has been sold, invoices will be mailed to the wrong payer and could result in lapsed coverage. L

GOOD NEWS: It’s good practice these days to check the status of your mortgage regularly, including any changes in mailing address, and always report any changes to your Trusted Choice insurance agent to keep your policy accurate. J

3. A mortgage company is not comparable to an Insurance company, even if they do go together like peanut butter and jelly.
Mortgage Companies profit from interest earned while Insurance Companies profit from sales. Interest is accrued and sometimes paying your bills via escrow reduces the accrued interest, which cuts mortgage profits. This may cause some mortgage companies to pay for escrowed items later than the due dates.

BAD NEWS: Unfortunately, unlike some of these items, due dates for insurance policies do not have grace periods. If your mortgage company doesn’t pay your insurance on time, you may be without coverage. Some people feel secure under the impression the escrow account is taking care of things, but assuming this without checking with your insurance company can result in lapsed coverage also. L

GOOD NEWS: Check with your mortgage holder to be sure the premium has been paid, and check with your Trusted Choice insurance agent to be sure your coverage has been placed. J

4.Life is full of changeMaybe you have made changes as simple as your mailing address or phone number, but didn’t think to contact your mortgage holder or insurance provider. Changes can be stressful and things as simple as this are easily overlooked in times of stress.

BAD NEWS: Misdirected mail may keep you from getting important notices that could jeopardize your mortgage or your coverages. L

GOOD NEWS: If you’ve made changes to your contact information, be sure to inform both companies to avoid issues. J

5. It’s always best to be pro-active
BAD NEWS: Once a policy has lapsed, you are at risk in the event of a claim and you also have to repeat the application and approval process which can extend your time without coverage. L

GOOD NEWS: The best way to be pro-active with your insurance and mortgage companies is to check in with both prior to your insurance renewal date by at least 2 weeks. No two companies are alike, and some updates may take up to 2 weeks to process. J
How to be Pro-active:
    1. Contact your insurance company to check payment and/or billing status:
      Has the renewal been paid yet? If not, verify the amount due and due date and contact your mortgage company.

    2. Contact your mortgage company and verify their mortgage clause and your loan number. Verify this information against your documents to be sure nothing has changed. If something has changed, contact your insurance company to update your account. Your Trusted Choice Insurance Agent stands ready to assist!

To help you through the maze of insurance coverages, carriers, premiums, and find ways to save money on your insurance, if you are on the Gulf Coast, contact your Trusted Choice agent, SouthGroup-Gulf Coast ,
SERVICE TEAM: Angelyn Treutel, Tammy Garfield, Dawn Garza, Tammy Hogue, Brittany Jones, Wendy Johnson, Denise Russell, Melissa Moran, Alex Treutel, Susan Monti, Kayleigh Davis, Anne Gillam, Ashlie Moody, and Whitney Zimmerman at SouthGroup Gulf Coast. You can reach us by snail-mail: 412 Hwy 90, Suite 6, Bay St Louis MS 39520, email: , phone:228-466-4498, fax:888-415-8922,
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Thanks for Susan Monti for her words of wisdom!!!

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