subject: Having Homeowners Insurance Billed thru Impound Account [print this page] Many home loans require that the borrower maintain an impound account that is associated with the loan. In most cases this account is used to renew the homeowners insurance associated with the property. These payments for the new business and renewal homeowner's insurance policies are mailed out directly from the insurance department that manages the account. Often times the homeowner does not need to verify the amount paid or coverage on the insurance.
With these payments being made without any effort be the insured, many homeowners are left with possible exposure regarding the coverage listed on the insurance policy. In addition, the insured will often be paying significantly more due to not checking the limits and premium on the policy. If the homeowner were to request quotes for the policies they would often times find that they can find a more comprehensive package at a competitive rate.
Consumer should often check the coverage that is listed on their homeowner's insurance policy. The dwelling coverage should be based upon the current rebuild cost of the home. Over time rebuild cost will change with inflation, availability of materials, and other economic factors. If these policies were to continue to renew for an extended period of time without any adjustments made to them it is possible that the homeowner could be significantly under insured.
Many homeowners are reluctant to change homeowners insurance companies when the policy is billed to the impound account. They often assume that it would be a challenge to change companies. This is not the case. If a homeowner were to change insurance companies and wanted the new homeowners insurance company to bill the lender directly it will often only take a single phone call from the insured to the lender to authorize the change in insurance companies. Homeowners should not hesitate t shop their home insurance simply because the payment is being made automatically.
Having Homeowners Insurance Billed thru Impound Account
By: Paul Woodward
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