Lender-Placed Insurance/Force-Placed Insurance
How lender-placed insurance works:
You're required to have certain types of insurance for your home. If you don't purchase an insurance policy you're required to have, your insurance lapses, or you don't have enough coverage, we'll purchase a policy for you. We do this so your home can be repaired or rebuilt if it's damaged. This is called lender-placed insurance, and it has serious disadvantages compared to most insurance policies.
Here's why it's best to avoid lender-placed insurance:
- Cost. The premiums for lender-placed insurance are usually more expensive.
- Coverage. You usually get less coverage than if you purchased a policy on your own. For example, lender-placed homeowners insurance only covers the replacement cost of your home; it doesn't cover the contents of your home or protect you from theft or personal liability.
Paying for lender-placed insurance
If a lender-placed insurance policy is required, we'll add the cost to your monthly mortgage payment. We'll keep it in an escrow account until your insurance bills are due. Then we'll use that money to pay the bills on your behalf.
Canceling lender-placed insurance
To cancel lender-placed insurance, you need to purchase a policy yourself or raise your coverage to the amount that's required. To show that you've met the requirements, send us a copy of the declarations page (usually the first page). We'll cancel your lender placed insurance once we've confirmed you have enough coverage.
What's Lender-placed Insurance?
- If your insurance lapses or you don't have enough coverage, we're required to purchase insurance on your behalf. We do this so your home can be repaired or rebuilt if it's damaged.
What's the difference between lender-placed insurance and insurance I purchase myself?
- Insurance you get through your insurance agent provides the best and most complete coverage. Lender-placed insurance is more expensive and covers only the structure of your property - it doesn't cover the contents of your home or protect you from personal liability.
Will Trustmark purchase lender-placed insurance without my knowledge?
- No. If we find a problem with your insurance, we'll send you letters explaining what you need to do. If we still don't receive acceptable proof of insurance, we'll let you know we're getting a lender-placed policy for you.
How will I be billed for lender-placed insurance?
- We'll add the insurance premium to your monthly payment. The money will stay in an escrow account until your bills are due. Then we'll use the money to pay bills on your behalf.
Can I cancel lender-placed insurance?
- Yes. When you provide proof of acceptable coverage, we'll cancel the lender-placed policy.
What should I do if I cannot afford my insurance premium?
- If you insurance isn't included in your monthly payment and you're unable to pay the premium, please call us at 1-800-844-2400 before your coverage expires. We can discuss options for paying the premium on your behalf. If we advance the premium for you, we'll add the cost to your future monthly mortgage payments.