Whether you want to change the terms of your loan or lock in a cheaper interest rate, refinancing your mortgage can be a smart financial decision. During this time, however, you may be wondering if refinancing has an impact on your home’s insurance. While most of the important points of your coverage will stay the same, refinancing means that there are a few extra steps that you need to take to keep everything in order. Let’s go over what those steps are, and how to make your refinancing go smoothly with your insurance.
You’ll Need To Inform Your Provider About The Change
Your homeowner’s policy will have all of the information about your mortgage on it. This is important for the insurance companies to have so that in the event of a claim the company will have a complete understanding of your situation. If you are changing the mortgage provider, or even if you are simply shortening or expanding the term of your loan, your insurance company will need to know. All you need to do is call your provider and have them update your information. Besides asking a few questions, this should be a very simple process, and have little impact on your insurance cost or coverage.
Your Mortgage Company Needs Your Insurance Information When Refinancing
The problem arises when you don’t inform your insurance company of the changes you are making. Mortgage lenders often require that your home is properly insured, and if your insurance is still showing your old mortgage, it could delay the process and create other issues down the road.
Informing your insurer about the refinance as soon as possible may help the procedure go more smoothly by allowing them to complete the revised paperwork beforehand.
Refinancing Will Leave Most Insurance Aspects The Same
Just because you refinance your home doesn’t mean that insurance coverage or cost will go up. In fact, your home coverage, liability protection, monthly premium, and other features will remain unchanged. Unless you are changing the value of your home by completing renovations or other improvements (which have little effect on your mortgage), your insurance coverage shouldn’t be affected.
If you were hoping that your home refinancing would lower the cost of your insurance, don’t be discouraged yet. Check out our article on ways to lower the value of your home to get cheaper insurance. Keep in mind, however, that this will not lower the value of your mortgage.
“Contrary to popular belief, not much needs to be done to your insurance when refinancing your home. As long as your insurance provider and mortgage company both understand how the home is insured and being paid for, you are most likely in the clear.”
Refinancing Is A Great Time To Re-Evaluate Your Insurance Needs
Although you are not required to modify your insurance coverage in order to refinance, it can be a convenient time to check your policy. You might want to update your coverage limits to make sure your investment is completely protected if you’ve made improvements to your house or if its value has increased. Additionally, if refinancing your home leaves some extra room in your monthly budget, it may be wise to spend more on your insurance and get extra coverage on the investment that is your home.
Time To Re-Evaluate Your Coverage? Let Strickler Insurance Help
Just like refinancing your home, updating your insurance needs is a great way to keep your budget on track, and make sure that you are fully covered for whatever life may throw your way. Whether you are looking to change your homeowner’s coverage or modify a different personal policy, the experts at Strickler Insurance can help you find the plan that best suits your needs. With over 150+ years in business, we have helped many families in the Lebanon, PA area and beyond protect what matters to them.
If you are ready to evaluate your insurance needs, contact Strickler Insurance today. We look forward to seeing how our team can help you and your family.
