How to change your homeowners insurance provider 

In this article: 

• Reasons homeowners switch insurance providers 
• Steps to follow when switching 
• Tips to make switching smooth and simple 

Many homeowners shop for new insurance providers to save money, improve coverage or take advantage of discounts. Changing homeowners insurance companies is common, but when you have a mortgage with an escrow account, the process requires a few important steps. If the transition is not handled correctly, it can lead to escrow shortages, force-placed insurance notices or incorrect billing. 

This guide explains how to switch homeowners insurance providers the right way and what you should do to ensure a smooth transition. 

Reasons homeowners switch insurance providers 

There are several good reasons you might want to change your insurance company: 

• Lower premiums. Another insurer may offer more competitive pricing. 
• Better coverage. You may want additional protection or improved policy features. 
• Bundling opportunities. Bundling home and auto policies can reduce overall insurance costs. 
• Customer service differences. You may prefer the service or responsiveness of another insurer. 
• Recent premium increases. A large increase may prompt you to explore new options. 

Switching insurers is a normal part of homeownership, but it’s important to follow the right steps to protect your mortgage account and escrow balance. 

Steps to follow when switching 

Step 1: Confirm your new policy before canceling your old one 

Do not cancel your existing homeowners insurance until your new policy is fully approved, active and issued. Having the new policy secured prevents any lapse in coverage, which lenders cannot allow. Make sure you receive: 

• A declarations page
• Effective dates
• Proof of coverage
• Confirmation of premium amount

Step 2: Provide Desert Financial with your new declarations page 

Once your new policy is active, send the full declarations page to Desert Financial Mortgage Servicing. This step ensures your escrow account reflects the correct information. Your declarations page should include: 

• Property address
• Coverage amounts
• Policy number
• Annual premium
• Insurance company contact information
• Effective dates

Step 3: Notify your old insurance company of the cancellation 

After the new policy is active and confirmed, contact your previous insurance provider to cancel the old policy. Important: When your old policy is canceled, your previous insurer will likely mail you a refund for any unused premium. This refund is extremely important for your escrow account. 

Step 4: Deposit the refund check into your escrow account 

If your old insurer sends you a refund check, deposit the refund into your escrow account. This prevents shortages later in the year. This is because the refund represents money originally collected in escrow for the old policy. If you keep the refund instead of depositing it, your escrow account will be underfunded. 

This can lead to: 

• An escrow shortage
• Higher mortgage payments
• A potential deficiency balance
• Extra adjustments on your next escrow analysis

Step 5: Confirm that Desert Financial paid your new premium 

Insurance switches can sometimes result in billing overlaps or delays. Contact your new insurer to make sure: 

• Desert Financial has been billed correctly.
• Your mortgage company is listed as mortgagee or payee. 
• The policy shows an active status.

Step 6: Review your next escrow analysis 

Your next annual escrow analysis will reflect your new premium amount. If your premium is higher, expect your monthly escrow payment to increase. If your premium is lower, your escrow may generate a surplus or a reduced payment. If the refund was deposited properly, your analysis should reflect a stable escrow balance. 

Reviewing your statement helps ensure everything aligns with your expectations. 

What happens if you do not send your new insurance information 

If Desert Financial does not receive your updated declarations page: 

• Your old policy may show as canceled.
• We may not receive billing from your new insurer.
• You could receive a force-placed insurance notice.
• A new, more expensive lender-placed policy may be added to your account.

These issues are easy to avoid by submitting your new policy information as soon as possible. 

What happens if you keep the refund check 

Keeping the premium refund instead of depositing it into escrow is one of the most common causes of escrow shortages. If this happens, you may see: 

• A shortage in your annual analysis 
• An increased monthly mortgage payment
• A deficiency balance that must be repaid
• Confusion about why your payment suddenly changed

If you already spent the refund, you can still make payment to your escrow account or spread the shortage over 12 months. 

Tips to make switching insurance providers smooth and simple 

• Never cancel your old policy before securing your new one.
• Always forward your new declarations page to Desert Financial promptly. 
• Deposit any refunds into your escrow account.
• Confirm that Desert Financial is correctly listed as the mortgagee.
• Double-check your next escrow analysis for accuracy.
• Keep copies of all policy change records.

When to contact Desert Financial 

We’re always here to support you with clear answers and member-first service. Contact Mortgage Servicing right away at (602) 433-7097 or firstmortgageservicing@desertfinancial.com if: 

• You’re planning to switch insurance providers. 
• You need help updating your mortgage records.
• Your new insurer needs billing instructions.
• You received a refund and want to deposit it.
• Your mortgage payment changed unexpectedly.
• You received a force-placed insurance letter.