Should I Pay My Home Insurance through Escrow?
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Should You Use Escrow to Pay Your Homeowners Insurance?

Por 8  am on


Like many homebuyers, you might be questioning whether you need to pay homeowners insurance via escrow during your purchase. It generally depends on the lenders, as some may require you to do it, while others don’t. When deciding whether to pay your home insurance through escrow, take into account the following factors.

Escrow Explained

Despite the common misconception, escrow isn’t an insurance policy, even though it’s often referred to as escrow insurance. This is an account set up to safeguard an insurance policy and protect the financial interest of one’s home. Among the various types of escrow accounts, real estate escrow and mortgage escrow are the primary ones.

Because escrow is created to hold funds to pay different expenses for homeowners, your lender will generally set up the account to pay your taxes and home insurance unless you specify otherwise. It would be best to state your preferences before signing mortgage documents.

Factors to Consider

Paying home insurance through escrow is a popular choice among buyers, as it decreases the chances of having to make large annual payments. However, different advantages entice people to pay these significant amounts directly. For example, if you pay directly and have a credit card account that offers rewards for large payments, you may prefer this method to receive those benefits, as opposed to paying through your escrow account.

Again, your lender may insist that you pay via escrow, so it’s best to learn what options are available. Lenders often look at credit criteria when determining if they’ll make escrow optional.


If your lender doesn’t require you to pay seguro de hogar through escrow, you should look at the advantages and disadvantages and decide what suits you best. One benefit is that the payments are always made on time because your money is in escrow. This is essential for your credit, and it’s a crucial type of insurance you cannot forget to pay.

It could be financially challenging to pay all at once instead of splitting the payments up. However, escrow allows you to make your home insurance payments on a regular schedule as you would other bills, dividing the payments up instead of requiring a lump sum.


Insurance isn’t always cheaper when you choose to pay with an escrow account. This account is typically where money is deposited to cover specific bills regarding your home, which can include real estate taxes, private mortgage insurance, and homeowners insurance. Because the escrow account doesn’t impact your premium, it won’t make the insurance costs cheaper or more expensive.

Switching insurance companies is permitted with escrow accounts if you refinance your home. However, if you would like to keep your current insurance plan, it should be permitted as well. A new lender may require you to obtain different types of coverage levels. For instance, you may need to add additional coverage to your current policy. These are questions you should ask your lender or your insurance company provider, as they can help you determine the best options to suit you and your property. 

Para un seguro de hogar confiable y económico, los propietarios de San Diego saben que pueden confiar en Altra Insurance Services. También proporcionamos inquilinos, comerciales, motocicletas y seguro de auto en Chula Vista. You can receive a free quote by calling one of our friendly agents today.

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