homeowner's insurance questions

[chiver78]

I bought my house in Jan 2015, and paid both homeowner's and flood insurance in full prior to closing (both were a condition of closing, actually). last month, I got an invoice for homeowner's insurance for 1/2016-1/2017 and paid it in full. I hadn't discussed anything with my insurance agent about changing how my policies would be paid, so I figured that I would pay both in full each January as I had in year 1. well, I just got an email alert from Chase - they hold my mtg note - to say that they had made an insurance payment out of my escrow account. um....?  I logged in to my online account and looked up the details, it looks to be a quarterly payment by the dollar amount.

do I call Chase to ask about this, my insurance agent, or the actual insurance company? if Chase is going to escrow my homeowner's insurance, I want the $1300 I paid out last month sent back to me. I haven't yet paid the flood insurance, that $1300 would come in handy toward the $2614 I have to send to the flood ins. company.

I've never had my homeowner's insurance come out of escrow before, so this is both completely unexpected and absolutely foreign to me. thanks in advance!

[Tiny]

If you have an escrow account - and have been paying into it for insurance and property taxes for the previous year - then Chase will pay the insurance (and property taxes).   You should have a document from Chase that outlines what your "mortgage payment" is made up of - P & I and then Taxes and Insurance.  The document should break out how much you are paying each month for T & I.

Did you get a recent 'year end' statement from Chase that did a break out of your insurance, property taxes and mortgage amounts?  from 2015.  And then showing the estimated payouts for 2016?  Maybe highlighting a new "mortgage" payment amount?  My "mortgage" payment varies from year to year - as insurance goes up and as property taxes increase.


Anyways... I'd first confirm with Chase that they are indeed paying the correct insurance policy and amount.   Then I would contact your insurance agency and see about getting your money refunded.  


Be aware you may also get Property Tax bills - which if Chase has $$ in escrow for it Chase will pay it.

You're monthly 'mortgage' statement should show the balance for your escrow account - and it will also show the payout for insurance and taxes. So you can kind of keep track that they are paying stuff.   OK, it's not very timely - but you should see the payouts the month AFTER they are made... so then if there is a problem you won't go months and months in a clueless state while the insurance, bank, and Tax Collector get their undies in a bunch without informing you of a problem.


The way it should work:   you get a yearly insurance packet with an updated policy from your insurance company - this gives you time to make any changes OR to change insurance company.    The insurance company then sends you a bill AND sends a bill to your mortgage holder.  You don't pay the bill.   Your bank does.     The same thing goes for Property Taxes.... you get sent the "bill" or notification so you can dispute it or whatever.  Your mortgage holder gets it too and should pay it.



FWIW:  It doesn't work that way with BoA.   For that mortgage and escrow account... each and every year I get a "renewal" from the insurance company with a Bill.  Sometimes I do question it and get the amount lowered (there's usually about $100 worth of stupid stuff that gets added in for my 'convenience' but that adds NO value what so ever to their service or their coverage).   Every year I get the property tax payment paperwork as well.   Every year, like clock work,  I  get a nasty gram from the insurance company saying the bill wasn't paid - usually a day or two AFTER BoA sends me a nasty gram saying the mortgaged property ISN"T insured.   I then contact BoA and include a copy of my Insurance Policy (the front page with all the info and policy number) and then BoA goes and quietly pays the insurance bill. .  I also get nasty grams from the Tax Collector about unpaid taxes - and then I call up BoA and, while basically polite, I suggest, that if it's NOT too much trouble, maybe they could pay the Property Taxes?   And then I tell them how much I hate them.

[Deleted]

First, you need to call Chase and see if they're planning to pay your flood insurance out of escrow, too!

My guess is that the insurer will issue a refund, either to you or to Chase. Unfortunately, it's likely to be issued to Chase since their check was the most recent. (Interesting that Chase chose to pay quarterly, which usually costs more than paying it all up front because the insurance company charges a fee with each installment.) I'm also guessing Chase will want to keep paying the insurance; escrow accounts are meant to protect the bank against your failure to pay property taxes or insurance. In that case, they need to know they don't have to make the next 3 quarterly payments since you paid for the year in full.

You may want to ask your agent how the extra payment will be refunded and how to get it in your pocket where it belongs.

I was forced by mortgage companies to have an escrow account (even on one where I put $100K down) until finally, at the age of 50, I got a mortgage company that let my make my own darn tax and insurance payments. I'm SO much happier with that.

[chiver78]

The way it should work: you get a yearly insurance packet with an updated policy from your insurance company - this gives you time to make any changes OR to change insurance company. The insurance company then sends you a bill AND sends a bill to your mortgage holder. You don't pay the bill. Your bank does. The same thing goes for Property Taxes.... you get sent the "bill" or notification so you can dispute it or whatever. Your mortgage holder gets it too and should pay it.
thank you. ^ this is why I'm confused. what came from the insurance company was an annual invoice, complete with due date. there was nothing in the packet about other payment options, including escrow. what I signed at closing did not indicate that paying anything other than property taxes through escrow was an option at all.

I think I'm going to start with my insurance agent first tomorrow. I will likely end up calling everyone by the end of the day. after figuring out whether I'll get back either the $1300 I paid last month (whole yr) or the $300 from escrow, my next question will be - is this policy going to be paid from escrow each year? if so, what's the deal with flood insurance, and do I need to pay that in full this month too?

[chiver78]

Jan 3, 2016 15:03:40 GMT -5 @athena53 said:

First, you need to call Chase and see if they're planning to pay your flood insurance out of escrow, too!

My guess is that the insurer will issue a refund, either to you or to Chase. Unfortunately, it's likely to be issued to Chase since their check was the most recent. (Interesting that Chase chose to pay quarterly, which usually costs more than paying it all up front because the insurance company charges a fee with each installment.) I'm also guessing Chase will want to keep paying the insurance; escrow accounts are meant to protect the bank against your failure to pay property taxes or insurance. In that case, they need to know they don't have to make the next 3 quarterly payments since you paid for the year in full.

You may want to ask your agent how the extra payment will be refunded and how to get it in your pocket where it belongs.

I was forced by mortgage companies to have an escrow account (even on one where I put $100K down) until finally, at the age of 50, I got a mortgage company that let my make my own darn tax and insurance payments. I'm SO much happier with that.

see, my tax payments have always been escrow. I think it was due to the nature of the mortgage programs I'd used. FHA, etc. with this place, I chose to use a USDA loan as it allowed me to keep what I'd planned to put in as a down payment so I could do some home improvement projects immediately. whether that was the best idea or not, who knows. but it's where I am.

[Tiny]

Jan 3, 2016 15:06:00 GMT -5 chiver78 said:

The way it should work: you get a yearly insurance packet with an updated policy from your insurance company - this gives you time to make any changes OR to change insurance company. The insurance company then sends you a bill AND sends a bill to your mortgage holder. You don't pay the bill. Your bank does. The same thing goes for Property Taxes.... you get sent the "bill" or notification so you can dispute it or whatever. Your mortgage holder gets it too and should pay it.
thank you. ^ this is why I'm confused. what came from the insurance company was an annual invoice, complete with due date. there was nothing in the packet about other payment options, including escrow. what I signed at closing did not indicate that paying anything other than property taxes through escrow was an option at all.

I think I'm going to start with my insurance agent first tomorrow. I will likely end up calling everyone by the end of the day. after figuring out whether I'll get back either the $1300 I paid last month (whole yr) or the $300 from escrow, my next question will be - is this policy going to be paid from escrow each year? if so, what's the deal with flood insurance, and do I need to pay that in full this month too?

Can you check the monthly "mortgage" payment documents (pdf) on line at Chase? Look back at November or October. This is the monthly paper work you would have been sent if this was before doing everything online. The monthly loan payment document should show your escrow account balance - and may even specify if it's ONLY taxes.  You may be able to deduce if the escrow is only taxes or not (based on the $$). I've never heard of a Property Taxes only escrow amount - there's always insurance in there... the bank want's to control/make sure their property is insured.

Maybe you should check with Chase first - if you really only have taxes being escrowed - maybe all you need to do is provide proof that you have insurance and that it's paid... and then let Chase work on getting their money back.   

You may want to reconfirm with Chase how much your "mortgage payment" will be for 2016.   It may have gone up - and if you did a 'set it and forget it' auto payment you might not be paying enough  for 2016.

[chiver78]

well, what I looked up just now was the most recent set of payments out of escrow. there was the normal tax payment plus a $295.xx homeowner's insurance payment. I have never seen that before, but in all honesty, I've never looked for it either. I've also never gotten an email notification about an insurance payment from escrow before, so I don't expect to see any others if I go back through the statements. I have a paperless account, so as long as my payment total hasn't changed, I don't really look further. I know, that's probably a bad practice.

as far as refund vs. stopping escrow for this year - I guess that was probably the question I should have asked in the first place. what typically happens in situations like this? obviously if I've PIF, anything coming from escrow will be a duplicate payment. I could have it reassigned to pay down principal, but quite frankly, I'd rather have it back in my pocket so I can pay off a few things instead.

[Deleted]

My mortgage is with Chase, too.  I bought my house in November so I might be one month ahead of you, but you should get a message on the website that an escrow analysis is coming. You can also pull up how your current escrow is calculated, showing you how much is for taxes and how much is for insurance.

I'd handle this with the insurance company first in hopes of getting my money back.  Otherwise, depending on when the escrow analysis is done, you may have to wait quite awhile to get any "overage" back.

They don't apply overage to principal although they tell you how you can.  They send you a check which you can either cash or endorse to them with instructions on applying it to principal.  I know this because I got my check for $81 last week.

[TheOtherMe]

I have a USDA loan.  My homeowner's insurance and property taxes are escrowed.  I don't have flood insurance so I don't know how that would be handled.

[Deleted]

chiver78, I started thinking about this, and it makes no sense.  Unless something happened and they only started escrowing the last quarter, they have collected a full year's premium for you.  According to your insurance company's notification, a full year's premium is due. 

I would talk to the insurance company first to get their take, but then I would also be talking to Chase.  They pay my insurance once a year, not quarterly.  I would really question why they are doing it this way.  I want to think they mixed up your taxes and insurance since I know some of you pay those quarterly.  (Mine are due yearly). 

Something odd is going on.  Not nefarious odd, just odd. 

[mollyanna58]

I'm an insurance agent.  Sometimes we are not notified that the mortgage company is escrowing, so the renewal bill gets sent to the client.  Then either the client or the mortgage company tells us the premium is escrowed, and we change the billing for the future.  This happens a lot for the first renewal, or the first renewal after a refinance.

However, I have never seen a mortgage company pay a premium  on an installment basis. 

[TheOtherMe]

I do receive a notice of my premium, but it says do not pay on it.  The property tax bill does not say do not pay.

[MarleyKeezy78]

We have our mortgage through Bank of America and our taxes and home owners insurance are escrowed. Never had any issues, I would definatly call both the mortgage company and the insurance company. Hope it's straightened out quickly!

[❤ mollymouser ❤]

Back when we had a mortgage, our property taxes HAD to be escrowed ~ we had a choice with homeowner's insurance, so we opted to just direct pay.

I hope you can get some clear answers.

[Value Buy]

In our case, we bought a home in Florida last spring.
We had to pay our home insurance and flood insurance for the year up front at closing.
Then our mortgage company started an escrow account for both items. It was all spelled out in the closing, and was not a surprise for us.

Our home up north, it was always part of escrow although we had no flood insurance there.

[chiver78]

oy. I just took a look at my mortgage account details. apparently I have been paying into escrow for homeowner's all year - $295.50/month. but I don't understand where they got that number from - my whole policy is only just under $1300. $295.50 x 12 months = $3546, which isn't enough to cover homeowner's AND flood. I really don't get it.

looks like I'm calling Chase first.

[chiver78]

interesting....

Your escrow analysis was completed on 05/19/2015, and covers the period 08/01/2015 through 07/31/2016.

Annual Expected Escrow Pay Out

Property Tax $2,328.83
Homeowner's Insurance $1,273.00
Flood Insurance $2,273.00
Wind Insurance $0.00
Mortgage Insurance $1,467.24
Total $7,342.07
Monthly Payment (Annual Amount divided by 12 months) $611.84
Your Escrow Minimum Balance = 2 months

Minimum Required Balance  $979.14
Low Point of Projected Escrow Balance (February 2016)  $979.09
Escrow Surplus/Shortage Footnote 1 -$0.05

and it's showing payments scheduled for both flood and homeowner's on 1/1/16, although the flood amount isn't right (too low) so I will have to make up a shortfall there.....

I wonder if I can have the insurance company apply the $1300 I sent them for the homeowner's policy to the flood shortage and send me back the difference. that would be nice...

but oy. I guess I was a lot more stressed around the time of closing than I thought I was. I completely missed that this would be escrowed. oops.

[ArchietheDragon]

Jan 4, 2016 9:38:52 GMT -5 chiver78 said:

interesting....

Your escrow analysis was completed on 05/19/2015, and covers the period 08/01/2015 through 07/31/2016.

Annual Expected Escrow Pay Out

Property Tax $2,328.83
Homeowner's Insurance $1,273.00
Flood Insurance $2,273.00
Wind Insurance $0.00
Mortgage Insurance $1,467.24
Total $7,342.07
Monthly Payment (Annual Amount divided by 12 months) $611.84
Your Escrow Minimum Balance = 2 months

Minimum Required Balance  $979.14
Low Point of Projected Escrow Balance (February 2016)  $979.09
Escrow Surplus/Shortage Footnote 1 -$0.05

and it's showing payments scheduled for both flood and homeowner's on 1/1/16, although the flood amount isn't right (too low) so I will have to make up a shortfall there.....

I wonder if I can have the insurance company apply the $1300 I sent them for the homeowner's policy to the flood shortage and send me back the difference. that would be nice...

but oy. I guess I was a lot more stressed around the time of closing than I thought I was. I completely missed that this would be escrowed. oops.

Since you are escrowing it all, just have them return the entire $1300 and let escrow take care of the payments. 

[chiver78]

I think that might end up being what happens. I just pulled up the electronic files from last year (for my policy numbers, since I'm at work and my file cabinet's at home) and it looks like homeowner's and flood is 2 different companies. that, I don't remember. I thought both were United Property and Casualty. going to have to ask about that.....

[chiver78]

ohhkay, so a few phone calls later, here's what has happened and what's going to happen:

12/19 - homeowner's paid by me ($1292)
1/2 - flood insurance was paid by Chase ($2614)  - this was the notification I got yesterday, not homeowners.
     I'd had a couple beverages during the football game and read the escrow detail page wrong. oops....
1/21 - homeowner's paid by Chase ($1273 by Chase ledger*)
2/4 - UPC releases refund to me.

*I am imagining that UPC will issue a bill to Chase in the meantime with the correct premium. the flood ins. company appears to have done so, as the disbursement is for the correct amount - which is higher than what I paid last January. if that doesn't happen, I expect to get refunded my full payment minus the difference.

I think tonight, I'll be going over my closing package to see what else I think is set up differently from what it actually is. oy.

[HoneyBBQ]

I always get a mortgage WITHOUT escrow because I have never found a mortgage company that can do it right. Good luck!

[chiver78]

Jan 4, 2016 10:54:40 GMT -5 HoneyBBQ said:

I always get a mortgage WITHOUT escrow because I have never found a mortgage company that can do it right. Good luck!

I have a feeling it was a requirement of the mortgage program I used - a USDA loan. the numbers all worked out best for me to take advantage of that offer, so I went with it.

instead of putting down a down payment, I was able to use that cash to fund a $6k patio in my backyard and a $2k landscaping project to level out the rest of the backyard. things that absolutely could have waited, but I wouldn't have gotten the "friends and family discount" if I'd waited for this guy to get any busier.

[HoneyBBQ]

Most mortgages assume you can't budget and pay your own taxes, so usually you have to demand (and pay) to get one without. I just don't have the energy to fight with them when they screw it up and double pay, don't pay, can't get the changes correct (either taxes going higher or lower), etc. I spent 6 months once trying to get 6 months of escrow back after having to close within a week of a property tax being paid -- the buyers' mortgage company insisted it be in the closing documentation and my mortgage company could NOT figure it out. So they paid, and I paid.... and I waited and waited and waited for my refund. SIGH.

Sucks. Maybe they'll be able to figure out they were wrong, but not likely. Poor yourself a beverage when you're on hold!!!

[andi9899]

Jan 3, 2016 20:59:56 GMT -5 mollyanna58 said:

I'm an insurance agent.  Sometimes we are not notified that the mortgage company is escrowing, so the renewal bill gets sent to the client.  Then either the client or the mortgage company tells us the premium is escrowed, and we change the billing for the future.  This happens a lot for the first renewal, or the first renewal after a refinance.

However, I have never seen a mortgage company pay a premium  on an installment basis. 

This. Any overage in payment should be refunded to the insured.

[chiver78]

Jan 4, 2016 11:10:38 GMT -5 HoneyBBQ said:

Most mortgages assume you can't budget and pay your own taxes, so usually you have to demand (and pay) to get one without. I just don't have the energy to fight with them when they screw it up and double pay, don't pay, can't get the changes correct (either taxes going higher or lower), etc. I spent 6 months once trying to get 6 months of escrow back after having to close within a week of a property tax being paid -- the buyers' mortgage company insisted it be in the closing documentation and my mortgage company could NOT figure it out. So they paid, and I paid.... and I waited and waited and waited for my refund. SIGH.

Sucks. Maybe they'll be able to figure out they were wrong, but not likely. Poor yourself a beverage when you're on hold!!!

oh I had a nightmare a few years back with my old condo that wasn't even MY mtg company's fault. there was some snafu with the city where another homeowner and I were both paying my parcel's taxes. so every other disbursement would be a $0 for me, b/c it had already been "paid" with the duplicate payment the quarter before. this went on for a number of years, where I'd get overage checks for $1100-1200. should I have looked into it then? yah, but I was too hung up on not being able to sell the place that I was just looking at it as free money to pay stuff off.     fast forward to 2012 (I think?) and I get a shortage notice - for $3100!    lots of phone calls later, including a good 2h one with the town clerk to figure out exactly what had happened, I ended up paying off the $3100 shortage. apparently when the error was discovered that summer, my mtg company paid out the difference in one lump sum.

I took all of my paperwork, and all of the returns for the affected years, with me to the accountant when it came time for taxes that year. we figured out that I had accurately reported the actual taxes paid out, rather than the total bill, in the affected years. since the $3100 shortage was technically taxes paid, I was able to write it off completely as a deduction. my refund that year was kind of ridiculous, but it went right back into the savings account that I'd pulled the $3100 out of in the first place.

I have to wonder though - if I had been able to sell my condo before the city discovered the mistake, would I have been able to avoid paying those back taxes?

[TheOtherMe]

Jan 4, 2016 11:00:05 GMT -5 chiver78 said:

Jan 4, 2016 10:54:40 GMT -5 HoneyBBQ said:

I always get a mortgage WITHOUT escrow because I have never found a mortgage company that can do it right. Good luck!

I have a feeling it was a requirement of the mortgage program I used - a USDA loan. the numbers all worked out best for me to take advantage of that offer, so I went with it.

instead of putting down a down payment, I was able to use that cash to fund a $6k patio in my backyard and a $2k landscaping project to level out the rest of the backyard. things that absolutely could have waited, but I wouldn't have gotten the "friends and family discount" if I'd waited for this guy to get any busier.

I had to escrow because of my mortgage being USDA.  It was with a previous bank (before the loan got sold).  That bank over escrowed every year and sent me a check.  I would promptly send it back because this place was being taxed as land only the first year I owned it and had a tax abatement the next year.

Now it's being taxed properly and the new bank actually dropped the payment $3 this year.

[CCL]

Jan 4, 2016 11:10:38 GMT -5 HoneyBBQ said:

Most mortgages assume you can't budget and pay your own taxes, so usually you have to demand (and pay) to get one without. I just don't have the energy to fight with them when they screw it up and double pay, don't pay, can't get the changes correct (either taxes going higher or lower), etc. I spent 6 months once trying to get 6 months of escrow back after having to close within a week of a property tax being paid -- the buyers' mortgage company insisted it be in the closing documentation and my mortgage company could NOT figure it out. So they paid, and I paid.... and I waited and waited and waited for my refund. SIGH.

Sucks. Maybe they'll be able to figure out they were wrong, but not likely. Poor yourself a beverage when you're on hold!!!

I'm with you on that. They never seem to get it right. For my most recent mortgage, they told me the only way to avoid an escrow account was to put down 20%+. I didn't want to, so now I'm stuck with it.

[wmpeon]

I bought a townhome in 2013.  In 2014, I got a bill for the upcoming year's home insurance, which I promptly paid.  I then got a semi-threatening letter from my bank, asking me to provide proof of insurance, otherwise my loan could be in jeopardy.  That's when I learned that I shouldn't have paid the insurance company directly, because I'd already been escrowing payments over the past year (my bad, I know).  Apparently my insurer made some error, which sent the bill directly to me instead of M&T, and was part of the reason M&T didn't think I was insured.  My insurer claimed it was "too late" to fix the issue and refund my payment, and that I'd just have to wait for M&T to reimburse me the money I'd been escrowing.  M&T did, about six months later.  So the good news is that I didn't lose anything, but it cheesed me off that I double-paid and locked up those funds for all those months. 

[HoneyBBQ]

Jan 4, 2016 22:18:54 GMT -5 wmpeon said:

I bought a townhome in 2013.  In 2014, I got a bill for the upcoming year's home insurance, which I promptly paid.  I then got a semi-threatening letter from my bank, asking me to provide proof of insurance, otherwise my loan could be in jeopardy.  That's when I learned that I shouldn't have paid the insurance company directly, because I'd already been escrowing payments over the past year (my bad, I know).  Apparently my insurer made some error, which sent the bill directly to me instead of M&T, and was part of the reason M&T didn't think I was insured.  My insurer claimed it was "too late" to fix the issue and refund my payment, and that I'd just have to wait for M&T to reimburse me the money I'd been escrowing.  M&T did, about six months later.  So the good news is that I didn't lose anything, but it cheesed me off that I double-paid and locked up those funds for all those months. 

This happens. ALL. THE. TIME. 

It's like the bank pretends they don't know they are escrowing your funds to pay that exact bill. It's a big scam IMO. Or they won't pay the insurance company til the VERY last second. It's like hiring a nitwit to pay your bills. 

[chiver78]

Jan 5, 2016 12:36:18 GMT -5 HoneyBBQ said:

Jan 4, 2016 22:18:54 GMT -5 wmpeon said:

I bought a townhome in 2013.  In 2014, I got a bill for the upcoming year's home insurance, which I promptly paid.  I then got a semi-threatening letter from my bank, asking me to provide proof of insurance, otherwise my loan could be in jeopardy.  That's when I learned that I shouldn't have paid the insurance company directly, because I'd already been escrowing payments over the past year (my bad, I know).  Apparently my insurer made some error, which sent the bill directly to me instead of M&T, and was part of the reason M&T didn't think I was insured.  My insurer claimed it was "too late" to fix the issue and refund my payment, and that I'd just have to wait for M&T to reimburse me the money I'd been escrowing.  M&T did, about six months later.  So the good news is that I didn't lose anything, but it cheesed me off that I double-paid and locked up those funds for all those months. 

This happens. ALL. THE. TIME. 

It's like the bank pretends they don't know they are escrowing your funds to pay that exact bill. It's a big scam IMO. Or they won't pay the insurance company til the VERY last second. It's like hiring a nitwit to pay your bills. 

^^^ THIS!! this is why I have to wait over 3 weeks for my refund - Chase isn't slated to pay the bill til the 21st, which is the due date. is it worth the trouble and aggravation to call Chase to ask them to bump that date up?