How Does Home Insurance Escrow Work?

  1. 14231 POINTS
    Tom Sheehan
    Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
    Some banks these days require that your Homeowners Insurance be paid by them from an escrow account.  If that is the case, then when you are closing on your home and obtaining insurance, they will require you to pay your insurance professional an amount equal to the full first year's premium.  The policy will then be set up to bill your mortgage company upon each renewal.  The monthly payments that you make to your mortgage company, in addition to principal and interest, will include an amount for the next renewal on your Homeowners Insurance.  Your insurance company will bill your mortgage company at the renewal and the annual premium will then be paid by your mortgage company from your escrow account.
    Answered on June 21, 2013
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