I paid off my loan that was escrowed (T&I) Do I have to?

Question

notify my ins. co. that the loan was paid off and I no longer need the policy?I'm assuming the bank does it and just refunds the difference,but I just want to make sure.

Answer 1

if you do that, it varies from bank to bank, but in general they do not notify your ins. co...it's your responsibility...although you will no longer be required to have ins. on the property, do you really think it's a good idea, not to?

the remaining balance of your escrow account must be refunded to you within 30days of closing the account.

Answer 2

One should not assume that the right things will happen with respect to one's money.

The bank was the agent/intermediary who managed the payments to the insurance company. I trust that you did not select the insurance company.

Obtain the address and department who handles the closure of loans. Make a quick call to that office to understand what to expect. You may also need to send a letter entitled, "Request for Refund of Insurance Premium". State the approximate amount of the expected refund.

You may hear a response that it takes a few weeks to formally close the paperwork on a loan. Determine an expected schedule.

As the bank likely arranged the insurance policy, it is not clear what type of arrangement/contract they have, i.e. in particular refund/cancellation policies. Hopefully, you can obtain a refund for the unused portion.

If in doubt, the Insurance Commissioner of your locality/state may offer some guidelines about regulations.

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Answer 3

I would contact your agent. The insurance company won't know for a little while, if you simply refinanced or sold. They'll make the cancellation effective the date of sale.

I am making the assumption you no longer own the home, and didn't just pay off the loan in cash. If that's the case, you should ALWAYS maintain insurance coverage on the home, whether it's mandated by a lender or not.

Answer 4

Don't assume. Send the insurance company a letter.
-MM