Force-Placed Insurance:
what happens when escrow misses a premium

A policy you did not buy, at several times the price

Your home insurance is paid out of escrow, so you never think about it. A letter arrives saying your lender has bought insurance on your behalf.

The policy they bought costs several times what yours did, and it protects them, not you.

From a missed premium to a lapsed policy

1. Your insurance premium is paid from escrow once a year.
2. That year, the payment did not go out, or went to the wrong address.
3. Your insurer canceled the policy for non-payment.
4. Nobody told you. The insurer wrote to an old address, or the lender did not pass it on.
5. Your home was uninsured for a period.
6. The lender noticed and bought its own policy, charging you for it.
7. That policy costs far more and covers only the lender's interest, not your belongings.

Why the lender's cover protects the lender

Force-placed insurance exists because the lender needs the building insured. If your policy lapses, they are entitled to buy one and bill you.

It is expensive because it is bought without shopping, without underwriting, and without you. It also usually covers only the structure, so your possessions and your liability are not insured at all.

The failure that starts it is often administrative: a wrong address, a payment sent to a previous insurer, a policy renewed under a new number. The consequence is disproportionate to the cause.

The signal: an annual premium that did not leave escrow

The payment that did not leave your escrow account. An annual insurance premium is a predictable, dated event, and its absence is as visible as its presence.

Where Plenee fits

• It watches for the annual disbursement. Escrow pays out once or twice a year on a

predictable schedule. A missing payment is a gap Plenee can raise while the policy is still live rather than after it lapses.

• It knows the amount. A premium that suddenly costs three times last year's is a

force-placed policy, and the size of the jump is the tell.

• It keeps the payment history that shows you funded the escrow account properly,

which is the argument for having the charge reversed.

The window here is narrow but real. There is usually a gap of weeks between a missed premium and a canceled policy, and that gap is when it is cheap to fix.

Getting force-placed cover removed and refunded

• Send proof of your own cover immediately. Once accepted, the force-placed policy

should be canceled and the charge refunded for the overlapping period.

• Ask why the escrow payment was not made, in writing. If the lender caused the lapse,

the whole charge is disputable.

• Check whether your contents are insured. Force-placed cover usually protects only

the building. You may have been uninsured for your possessions without knowing.

• Confirm your insurer has the right address and the lender has the right policy

number. That mismatch is the usual root cause.

How often insurance sits behind an escrow complaint

Insurance problems appear within the escrow complaints, which are about one in twenty-four mortgage complaints.¹ Roughly a quarter of that group centers on insurance rather than taxes.²