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Sam, Attorney at Law
Category: Legal
Satisfied Customers: 27011
Experience:  More than 20 years of experience practicing law.
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I wanted to change insurance carriers as I was being grossly

Customer Question

I wanted to change insurance carriers as I was being grossly overcharged. I file the insurance and it was billed to mortgage handler. they instead paid the existing company out of my funds which was $711 more than the company I choose with no notice to me. Is that legal?
Submitted: 2 years ago.
Category: Legal
Expert:  Sam replied 2 years ago.
This is Samuel and I will discuss this and provide you information in this regard
Please tell me what you mean when you say "Is that legal?" Is what legal?
Also, what is the status at this time on the old insurance; has it now indeed been cancelled?
What was the time frame allowed for the bank to input the new insurance information into the data base as compared to when an automatic payment is made to the insurance you wanted to cancel?
Customer: replied 2 years ago.
I received no notice and it was stated they paid it in July
Customer: replied 2 years ago.
Are they allowed to pick my insurance carrier?
Expert:  Sam replied 2 years ago.

Thank you

When money is paid within the mortgage as an Escrow for such things as insurance and taxes, it is done on an automatic program without further notification to the customer. And so if you have notified the lender that you switched insurance carriers it is possible that they did not get the new information into the data base before the automatic payment was made to the Old/current insurance carrier.

I suggest there have been no laws broken. But once the old/current insurance carrier is notified in writing by you that you have new insurance and it is verified with the lender, the insurance company should return the money to the lender to be placed back into your escrow account

If the insurance you have chosen is not enough to cover what the lender requires, they can deny the change.

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Thank you