8 min read
Jan 15, 2025
Why You Can't Shop Lender Placed Insurance Carriers
Homeowners often ask, "Can I switch to a cheaper force placed company?" The answer is generally no.
Exclusive Agreements
Lenders have exclusive contracts with specific insurance providers (like Assurant or Proctor Financial). They do not shop around for you. The system is automated to place coverage with their contracted partner immediately upon a lapse.
No Consumer Retail
These insurance carriers generally do not sell these specific policies directly to consumers. You cannot call them up and ask for a better rate on a force placed policy.
The Solution
You must leave the force placed system entirely. Shop for a standard HO3 policy in the private market. That is where competition exists and prices are lower.
Related Posts
How to remove force placed homeowner insurance
A Simple Exit Plan That Often Works
Once you understand how you arrived at force placed coverage, the next goal is usually to replace it and restore full protection.
01
Secure New Coverage
Shop for a policy that fits your specific situation, whether through standard insurers or high-risk "excess and surplus" markets.
Ensure your new coverage restores the personal property and liability protection that force-placed policies often omit, and verify that dwelling limits are based on replacement cost rather than just your loan balance.
02
Submit Proof
To cancel the lender’s policy, you must provide a complete proof of insurance package.
This typically includes a full declarations page and the servicer's specific mortgagee clause—including your loan number—to prove your coverage meets the minimum requirements of your mortgage contract.
03
Confirm Cancellation
Once your servicer accepts the proof, they will typically cancel the force-placed policy and issue a pro-rated refund to your escrow account.
Monitor your account to ensure the refund is applied and that your monthly mortgage payment is recalculated to reflect the lower insurance costs.