My home insurance was dropped and I have a mortgage. What happens?

Why your servicer cares

Your home is the lender's collateral, so the mortgage contract almost always requires insurance. When your insurer non-renews or cancels, the servicer usually hears about it, either from the insurer or when a renewal isn't paid from escrow.

What federal rules require before you are charged

Under Regulation X (12 CFR § 1024.37), which covers most residential mortgages:

1. 1

   First notice — at least 45 days before any charge

   It must explain what is needed and state that force-placed insurance may cost significantly more and may not provide as much coverage as insurance you buy.
2. 2

   Reminder — at least 15 days before any charge

   Sent no earlier than 30 days after the first notice.
3. 3

   Cancellation and refund

   Within 15 days of receiving evidence that you had qualifying coverage, the servicer must cancel the force-placed policy and refund premiums for any overlap.

What to do

1. 1

   Tell your servicer about the non-renewal early

   Ask what proof of coverage they need and where to send it.
2. 2

   Arrange replacement coverage before the end date

   Even a last-resort plan can meet many lenders' requirements — ask the servicer.
3. 3

   Send the new declarations page as soon as you have it

   Keep a copy and a record of when you sent it.
4. 4

   If you were charged, send proof and ask for the refund

   Point to the 15-day cancellation rule.

Questions about the notices themselves go to your servicer first; complaints about a servicer can be submitted to the Consumer Financial Protection Bureau.