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Lender-Placed Insurance

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.

Image of a graph with cost on the vertical axis and coverage on the horizontal axis. Lender-placed insurance is in the region with higher cost and lower coverage. Other homeowners insurance is in the region with lower cost and higher coverage.

See our FAQs to learn more.

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 of your policy (usually the first page). We'll cancel your lender-placed insurance once we've confirmed you have enough coverage.