When getting a mortgage, all lenders require that you have homeowners insurance on your home at all times with enough coverage to protect their investment.You should always make sure that your insurance company is aware of the proper mortgage servicer address to send the bills to. Particularly if your loan is sold, or you change insurance companies. If your mortgage servicer does not have written proof of a valid, up to date insurance policy, they may "force place" your insurance coverage with a very expensive source.
The lender won't be concerned with getting you the best rate on this insurance policy either. Force placed insurance can be very costly. The best way to avoid this is to make sure that you aren't dropped from coverage for any reason.
An instance where lenders force place insurance on you is when your existing policy expires or lapses without a new policy being forwarded over to the lender. If you have impounds on your loan and your loan is resold, it is always in your best interest to let your insurance company know who the new lender is, the corresponding loan number and mortgagee clause if possible.
