If you have a mortgage with an escrow account, you have likely or will likely experience a time when your home insurance fails to get paid by your mortgage servicer before its expiration. This can be a terribly frustrating time for you. But if you live in Florida, just know that the state of Florida has your back.
In Florida, the state gives you a 90 day grace period for the home insurance to be paid by your mortgage company out of your escrow account. If the payment arrives to your insurance carrier within that 90-day window, the state requires the insurance company to reinstate your insurance retroactive to the policy expiration date without a lapse or gap in coverage.
So what if your received a cancellation notice from your insurance company…..does this mean you’re not covered?
Technically, yes it does, that is… until your insurance payment arrives. So long as your mortgage company remits payment to your insurance company within that 90-day window….coverage will be retroactively reinstated and your good to go.
But it doesn’t stop there…..what if your mortgage servicer fails to pay within the 90 days. In this instance, you would have a gap in coverage but the state will require your mortgage company to pay the difference between what you were paying for insurance and the cost of a new comparable home insurance policy for two years.
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