Did you receive a letter saying your mortgage has been transferred to a new mortgage company or loan servicer?
If so, you may be wondering whether you need to make changes to your homeowners insurance.
You usually don’t need to purchase a new homeowners insurance policy just because your mortgage company changes. However, you should notify your insurance agent as soon as possible.
When your mortgage is transferred, your insurance policy may need to be updated with the new mortgagee information, including the mortgagee clause and loan number.
Taking care of this update can help make sure your insurance company has the correct information for your new mortgage servicer and that important policy documents and insurance bills are sent to the right place.
Why Does My Insurance Company Need to Know About the Mortgage Change?
Your homeowners insurance policy includes information about the lender or mortgage servicer that has a financial interest in your property.
This information is generally included in the mortgagee clause.
Your mortgage company may change because your loan is sold, transferred, or assigned to another company for servicing. When that happens, the new mortgage company may have different instructions for where insurance documents and bills should be sent.
The new mortgage servicer will typically provide you with its insurance requirements and the information needed to update your policy.
What Is a Mortgagee Clause?
A mortgagee clause identifies the mortgage lender or servicer that has a financial interest in your home.
Because your home serves as collateral for your mortgage, the mortgage company has an interest in making sure the property remains properly insured.
The mortgagee clause generally includes information such as:
- The mortgage company or loan servicer’s name
- The mortgagee’s mailing address
- Required wording such as “ISAOA/ATIMA” when applicable
- Your mortgage loan number
The exact wording and address are important. Mortgage servicers may have specific requirements for how their information should appear on your insurance policy.
What Should I Do When My Mortgage Company Changes?
If you receive a notice that your mortgage has been transferred to a new company, contact your insurance agent and provide the new mortgage information.
You should provide your agent with the information supplied by your new mortgage company.
This may include:
- The new mortgage company’s name
- The new mortgagee clause
- The new mailing address
- Your new loan number
- Any insurance submission instructions provided by the new mortgage company
Your current insurance agent can use this information to update the mortgagee information on your homeowners insurance policy.
Do I Need a New Homeowners Insurance Policy?
Not necessarily.
A change in mortgage company or loan servicer does not automatically mean you need to replace your homeowners insurance policy.
In many situations, your existing homeowners insurance policy can remain in place while the mortgagee information is updated.
The important thing is to make sure your insurance company has the correct information for the new mortgage company.
Your insurance agent can help determine what needs to be updated on your policy.
Why Is the Loan Number Important?
Your mortgage loan number helps the mortgage servicer identify your specific mortgage account.
When your mortgage is transferred, your loan number may change.
That’s why you should provide your insurance agent with the new loan number supplied by your mortgage company.
An incorrect or outdated loan number can make it more difficult for the mortgage servicer to match your homeowners insurance policy with your mortgage account.
What Happens If I Don’t Update My Insurance?
If your mortgage company changes and the insurance information is not updated, the new mortgage servicer may not have the correct insurance information on file.
This can create problems with:
- Receiving your insurance bills
- Processing insurance payments from escrow
- Receiving policy documents
- Verifying that you have the required insurance
- Making sure the correct mortgagee is listed on your policy
Mortgage servicers specifically advise homeowners to update their insurance information after a loan transfer. Some servicers warn that failing to provide updated insurance information could eventually result in lender-placed insurance being purchased if they cannot verify coverage.
What If My Insurance Is Paid Through Escrow?
If your homeowners insurance premium is paid through your mortgage escrow account, updating the mortgagee information is especially important.
Your new mortgage servicer may be responsible for making future insurance payments from your escrow account.
Your insurance company needs the correct mortgage servicer information so that bills and other policy documents can be directed appropriately.
After your mortgage transfer, review your mortgage statements and insurance information to make sure everything has been updated correctly.
If you have questions about your escrow account, contact your mortgage servicer directly.
What If My Mortgage Company Sends Me a New Mortgagee Clause?
Keep it.
Your new mortgage company may send you a letter or document containing the exact mortgagee clause and address that should appear on your homeowners insurance policy.
Give this information to your insurance agent.
Don’t try to guess the correct mortgagee name or address. Mortgage companies can have specific legal names, mailing addresses, and formatting requirements.
For example, the mortgagee listed on your insurance policy may not simply be the brand name you see on your mortgage statement. The legal entity and mailing address provided by the mortgage company should be used.
What Information Should I Give My Insurance Agent?
When contacting your insurance agent, it is helpful to have the mortgage transfer information available.
You can provide:
New Mortgage Company:
[New Mortgage Company Name]
New Mortgagee Clause:
[Exact mortgagee clause provided by the mortgage company]
New Loan Number:
[New Loan Number]
Providing the exact information from your mortgage company can help your insurance agent make the appropriate update to your policy.
After the Update, Review Your Insurance Documents
Once your insurance agent processes the mortgagee change, review the updated insurance documents.
Make sure:
- The new mortgage company is listed correctly.
- The mortgagee address is correct.
- The loan number is correct.
- Your homeowners insurance coverage itself has not been changed unless you requested a change.
Your insurance agent or insurance company may provide an updated declarations page or other evidence of insurance showing the new mortgage information.
You may also need to provide the updated insurance documentation to your new mortgage servicer, depending on its requirements.
Don’t Wait Until Your Mortgage Company Contacts You
If you receive a notice that your mortgage has been transferred, it’s a good idea to contact your insurance agent promptly.
Even though your homeowners insurance policy may not need to change, the mortgagee information on your policy may need to be updated.
A quick call or email to your current insurance agent can help make sure the new mortgagee clause and loan number are added to your policy and that your new mortgage company has the insurance information it needs.
HomeInsuranceFlorida.com Can Help You Shop for Coverage
At HomeInsuranceFlorida.com, our Florida-licensed agents cannot make changes to your existing homeowners insurance policy. Only your current insurance agent or insurance company can update that policy.
However, we may be able to help you shop for a new homeowners insurance policy if your current policy was canceled because of a mortgage change or because your insurance information could not be verified.
If you have received a cancellation notice, contact us to discuss your options. We can help you compare available coverage with participating insurance companies, subject to eligibility, underwriting guidelines, coverage availability, and property details.
Changed mortgage company? Make sure your homeowners insurance information is updated.
Contact HomeInsuranceFlorida.com to speak with a Florida-licensed insurance agent about shopping for coverage if your policy has been canceled.
Coverage terms, conditions, eligibility, and availability vary by insurance company and property.
