5 Steps to Change Homeowners Insurance Paid Through Escrow

If you’ve owned your home for a while, you may wonder if your homeowners insurance is still a good deal. But just when you’re about to start comparing quotes, you remember: Your insurance premiums are paid through an escrow account.

Panic prickles up your neck as you realize you’re not entirely sure what escrow means, never mind what happens to it if you change insurers.

But changing homeowners insurance, even when it’s paid through escrow, is pretty painless. Just follow the steps below.

First, what’s an escrow account?

If closing day was the last time you heard the words "escrow account," here’s a quick refresher:

• It’s where your lender stashes a portion of each mortgage payment you make.

• Your lender uses the funds to pay property tax and homeowners insurance bills on your behalf.

• Escrow accounts are generally required if your down payment is less than 20%.

Escrow makes paying taxes and insurance a “set it and forget it type of thing,” says Jason van den Brand, CEO and co-founder of Lenda, a San Francisco-based mortgage lender.