Mortgage Co. Billing Us For "Hazard" Insurance In Our Escrow Account

[CLASSIEM]

MICHIGAN

We have our Homeowners Insurance through Hanover/Citizens Insurance Company and we make our payments directly to them.

We have our Home Mortgage with Citi Mortgage and our escrow account shows they are billing us for "Hazard Insurance." Our mortgage has been sold several times since we bought our house over 13 years ago and just want to make sure this is a legit charge.

Since we already have Homeowners insurance and do Not live in any flood zone or anything like that...Do we need to have this "hazard Insurance" through our mortgage company?

What is the difference between our Homeowners Insurance and the Hazard insurance with our Mortgage company?

Thanks so much for your help!

ClassieM
What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state?

 

[nextwife]

REview your mortgage documents. They may be entitled to escrow for hazard insurance- however, it is normally not their right to choose the insurance. Many states actually make it illegal for a lender to REQUIRE a particular insurance provider as a condition of the loan.

So pull out your mortgage docs and see you are exempted from escrow (I opted oout of tax or insurance escvow on my home, for example).

I'd suggest you contact customer service, provide proof of insurance, making certain they are named in accordance with your mortgage requirements, and ask them to cancel the duplicate coverage.

 

[efflandt]

The hazard insurance you are being billed from escrow is probably because your mortgage has been resold and your current mortgage company has no proof of your homeowner's insurance because you forgot to tell your insurance company about the lender change.

So without proof that you have homeowner's your mortgage documents likely state that they can provide hazard insurance and charge you for it. But that is expensive insurance that only protects their interests, not yours. That could also be a problem if you do have a loss and your insurance company makes the check out to you and a lender no longer involved in the loan.

Get on the horn with your lender and see where you should send proof of insurance (if not obvious from statements), and then notify your insurance company.

 

[CLASSIEM]

Thanks! Good Advice. I will contact them tomorrow.

I'll let you know what I find out.

Thanks again!