My homeowners insurance payment is combined with my mortgage payment. Who gets to select my insurance company and coverage?

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Asked June 19, 2015

1 Answer


When you purchase a home, the lender has the right to require you to carry homeowners insurance for the duration of the mortgage. Some lenders only require you to have mortgage insurance, which protects the lender's investment but not your own, while others will require you to carry both types of coverage.

The lender may have a preferred insurer that they work with on most loans. If this is the case, getting the coverage can be simplified, and may even be rolled into the mortgage itself. You do not have to use the insurance company the lender prefers, and buying the coverage through another company may even save you money. If the lender insists on using a particular insurance company, be wary. It may be that the lender is receiving special treatment of favors in exchange for featuring the insurer, costing you more than buying a policy from another source.

One way to save money on your home insurance is to purchase it through the same company which handles some or all of your other insurance needs. For insurance companies, the risk of a claim goes down as the number of policies written for an individual goes up. For example, needing to file a claim for your car and home at the same time is extremely rare, so purchasing both policies through the same company earns you a discount on your total insurance premiums, usually across all policies involved, but always.

Before you agree to purchase any home insurance policy, be sure to check the financial standing of the company, especially the long term outlook. To do that, use the A.M. Best company website. That site provides an easy to follow letter grading scale that indicates, at a glance, the current and long term financial outlook of the company. Even if the insurer advertises a particular rating, take the time to double-check, because ratings vary and you may getting old information from the representative.

Answered June 23, 2015 by Anonymous

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