Hazard Insurance is an insurance product that covers fire damage to your property. If you borrow money on your home this is one of the insurance products that you will be required to purchase for your home. The lender will require a comprehensive insurance policy that covers specific hazards to your property. Some of these hazards are damage from storms, floods, earthquakes, tornadoes, hurricanes to name just a few. Your escrow account will hold the monthly premiums until the annual payment is due. The escrow account is the account the lender sets up for your monthly payments of property taxes, insurances, and other fees associated with your home mortgage. You will be asked to update your hazard insurance with the mortgage company if the loan is sold to another company or the limits are changed by your mortgage provide. For example: If there is a marked increase or decrease in the value of properties in your neighborhood area, the ender may require you to increase your insurance coverage or you may want to decrease your coverage if your home value drops by a substantial amount.
The following instructions are moderately easy for you to follow and will show you how to update your hazard insurance.
The first step is for you to gather up your insurance information. Read your copy of your hazard insurance policy carefully. Familiarize yourself with the terms and conditions that are written into the policy.
The second step is to call your agent. His name and phone number or additional contact information should be listed on your policy or on a page attached to the policy. You are the only person authorized to make changes to the policy, even though it is required by and the payments managed by your lender through your escrow account.
The third step is to give your agent your name and policy number. Your agent should have a copy of your policy on file and be able to pull it up to verify your coverage terms. You agent will probably take the time to verify that your contact information and that of the lender are correct and current.
Step four is your request to the agent to change your hazard policy or update the coverage amounts. You should have the lender’s requirements available to share with your insurance agent. You will need a start date for the effective date of change. Make sure that the agent has the contact information correct for your lender and that the company is shown as a lien holder. You will want a copy of the change and will want to ensure that the agent sends a copy to the lender.
Step five is the last step. You will need to make follow up contact with the lender who initiated the change request by contacting you to update coverage. When you have received your copy of the changes, your lender should have received their copy as well. If the lender does not have a copy you can fax, email, or mail a copy to them.