Homeowners Insurance
Best Practices for Switching Homeowners Insurance
Switching homeowners’ insurance can help you save money and obtain better coverage, but it's essential to follow a careful process to avoid coverage gaps or issues with your mortgage lender. Follow these best practices:
1. MAKE SURE YOU HAVE CONTINUOUS CONVERAGE
Always ensure that your home has continuous insurance coverage with no gaps between policies. Arrange for your new policy to start before canceling your old policy—ideally, with at least a one-day overlap. This prevents any uninsured periods that could put you at risk.
2. UPDATE YOUR MORTGAGE CLAUSE
You must list FocusOne Mortgage Solutions on the mortgagee clause of your policy. The mortgagee clause should read:
FocusOne Mortgage Solutions
ISAOA/ATIMA
PO Box 2062
Carmel, IN 46082
Not doing so risks a hold in the verification process, incomplete insurance verifications are flagged for force-placed insurance. (Force-Placed Insurance protects the Lender’s interest, not any household belongings.)
3. PAYING OUT OF POCKET VS. FROM MY ESCROW ACCOUNT
If your new policy's effective date is within 60 days of your current policy's renewal: You can request FocusOne Mortgage Solutions to pay the annual premium from your escrow account, provided there are sufficient funds.
If your new policy's effective date is more than 60 days before your current policy's renewal: If the effective date of your new policy is more than 60 days before your current policy's renewal, consider paying the premium out of pocket. This helps prevent potential escrow shortages that could lead to higher monthly mortgage payments. Once the previous insurance is canceled, any unused premium will be refunded to the policy owner.
This does not include flood insurance on properties located in a Special Flood Hazard Area. Flood insurance is required to be escrowed if you are in a SFHA and should not be paid by the borrower.
4. NOTIFY FOCUSONE MORTGAGE
If you pay the new policy's annual premium out of pocket, notify FocusOne Mortgage Solutions once the new policy is active at:
Phone: (832) 912-2168 or (866) 520-4702
Obtain a declaration page from your new insurer. If the declarations page does not show that the premium has been paid, you need to obtain a receipt showing a zero balance is due. Submit all documentation using one of the following methods:
Email: Insurance@focusone.com
Fax: 832-327-0081
Failure to provide proof of your new policy could result in force-placed insurance, which typically has higher premiums and less favorable coverage.
5. CANCEL YOUR OLD POLICY PROPERLY
Only cancel your old policy once you have confirmed that your new policy is active. Request written confirmation from your previous insurer to avoid unintended renewals.
6. MONITOR YOUR ESCROW ACCOUNT AND STATEMENTS
If you receive a refund for the unused portion of your canceled policy, consider applying it to your escrow account. Doing so can help offset any potential shortage in your escrow balance and stabilize your monthly mortgage payment.