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Monday, January 13, 2014

Walking the Tight Rope - The Fine Line Between Your Escrow Account and Your Insurance

You may feel confident that paying into your escrow account for your insurance and taxes, as well as your loan, ensures that your bills are paid. In the past this seemed to be true, but in more recent years, we are seeing a different trend. We are seeing a pattern of many mortgage companies waiting until the last minute to pay an insurance bill from your account. In the insurance industry time is of the essence. Policies lapse when renewals aren't paid, and while they can be reinstated within a grace period, if a claim occurs during the lapsed period, it may not be covered. That's dangerous territory to be in.

Many consumers believe that mortgages and insurance are one in the same, because escrow accounts tend to muddy that water. The truth is many mortgage companies will not communicate directly with insurance agents because the consumer is THEIR client, not the insurance agent. The communication gap is another strain in getting policy renewal premiums paid in a timely manner. As Trusted Choice Agents, we have seen many consumers are unaware their mortgage company has not paid their insurance renewals and will not discuss your account with our agency. What can be even scarier is on the very frequent occasion that a consumer's mortgage was sold from one company to another, and the consumer is unaware of the change, and the insurance agent has not been notified of the change, and the insurance renewal billing is sent to the wrong address.

Many consumers are currently refinancing their mortgages for better rates. Mortgage Companies want Insurance Companies to provide proof of insurance listing this new mortgage prior to the closing of the financing. This is a logical request in some ways, but what happens if the financing falls through for one reason or another? It is NOT the mortgage company’s (who didn’t get your business) responsibility to contact the insurance company to let them know that the insurance needs to be changed again to the original loan information - it is the consumer’s responsibility to let their Trusted Choice Agent know that another policy change is required. Without proper notification to your insurer, your insurance billing will be misdirected if your policy is paid via escrow.

So, as you walk that fine line between your escrow and your insurance, our best advice for you is to be pro-active at your renewal. If your policy has lapsed, you are at risk in the event of a claim, and you may also have to repeat the insurance application and approval process, which can extend your time without coverage, or you will have your insurance coverage "force-placed" by the mortgage holder, which is a huge expense to you. The best way to be pro-active with your insurance and mortgage companies is to check in with both at least 2 weeks prior to your insurance renewal date. No two insurance companies are alike, and some updates may take up to 2 weeks to process. Here are some ways to be Pro-active in this situation:

1)Contact your Trusted Choice Insurance Agent to check on 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 Trusted Choice Advisor to update your account. Find out if the mortgage holder has sent payment for your insurance renewal. If they have - request the check number, amount and address it was sent to. If they have not - advise them of the renewal information provided by your insurance company.

3)Advise your mortgage company that you agree to have your mortgage and escrow information communicated with your insurance agent, and that you request they work together to get your insurance paid in a timely manner.

Remember, SouthGroup Insurance Services Gulf Coast has a team of professionally trained Trusted Choice agents who are eager to assist you with your insurance renewals as well as all of your insurance needs. Call on us today or visit one of our 3 convenient coastal locations to learn more.

Your Trusted Choice Insurance Agent stands ready to assist you. We help you through the maze of insurance coverages, carriers, and premiums, and we find the best personal and business coverage for you at affordable rates. We help you save money on insurance --- and we save you time!  And remember, when it comes to insurance, one size does not fit all.

We are your LOCAL Trusted Choice Advisors, SouthGroup-Gulf Coast / ,
SALES AND SERVICE AGENTS: Angelyn Treutel Zeringue, Tammy Garfield, Tammy Hogue, Brittany Jones, Wendy Johnson, Denise Russell, Melissa Moran, Alex Treutel, Susan Monti, Anne Gillam, Ashlie Moody, Michael Reso and Whitney Zimmerman at SouthGroup Gulf Coast. You can reach us by snail-mail or in person: 412 Hwy 90, Suite 6, Bay St Louis MS 39520, email: , phone:228-466-4498, fax:888-415-8922,  FaceBook, or Twitter !
We have 3 Gulf Coast locations to serve you - 2505 Pass Road - Biloxi, 5400 Indian Hill-Diamondhead, and 412 Hwy 90 Ste 6-Bay Saint Louis, MS. We write coverage in 40 different states and can assist you with Mississippi insurance, Louisiana insurance, and Alabama insurance and many other states.

Thanks to Susan Monti for her words of wisdom! 

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