Force-Placed Insurance

Force-placed insurance, also called lender-placed insurance, is a policy your mortgage servicer buys on your home when it believes your own homeowners policy has lapsed or does not meet the loan's requirements. The servicer adds the cost to what you owe, often through escrow. Before it can charge you, federal rules require written notices, the first at least 45 days before any charge and a reminder at least 15 days before (12 CFR 1024.37). The way out is to send proof of acceptable coverage. The servicer must then cancel the force-placed policy and refund premiums for any overlap.

Why servicers place it

Your mortgage requires you to keep the home insured. If the servicer stops seeing proof of coverage, because the policy was cancelled, not renewed, or the servicer's name is wrong on the policy, it protects its collateral by buying a policy. Force-placed coverage is usually more expensive than a policy you buy and is designed to protect the lender's interest in the structure. It often does not cover your belongings or your personal liability. The CFPB explains these risks (CFPB).

The federal notice timeline

1. First notice. At least 45 days before charging you, the servicer must send a written notice explaining that it does not have proof of coverage and what you need to send.
2. Reminder notice. At least 15 days before charging you, and no sooner than 30 days after the first notice, the servicer must send a reminder.
3. Charges. The servicer cannot charge you for force-placed insurance unless it had a reasonable basis to believe you failed to keep required coverage and it followed the notice rules.
4. Cancellation and refund. Once you provide evidence of coverage, the servicer must cancel the force-placed policy and refund premiums and fees for any period of overlap.

Escrowed borrowers have an extra protection: if your escrow account pays your insurance, the servicer generally must keep paying your own policy rather than force-placing coverage, as long as you are not more than 30 days overdue.

How to get it removed

1. Call your insurance agent and confirm your policy is active, with the correct mortgagee clause naming your current servicer and loan number.
2. Ask the agent to send the declarations page directly to the servicer's insurance department.
3. Send it yourself too, using the address or portal on the servicer's notice.
4. Follow up until the servicer confirms in writing that the force-placed policy is cancelled and any overlap is refunded.

A cancelled check is not proof of coverage. The declarations page is.

Common causes in Texas

• Servicing transfers or refinances. The new servicer is not on the old policy, so the insurer's notices go nowhere. See lender, servicer and investor.
• Non-renewals after storm seasons. North Texas insurers sometimes non-renew homes with older roofs. See wind and hail coverage.
• Deductibles above the investor's limit. On loans sold to Fannie Mae, each deductible for a required peril cannot exceed 5 percent of the coverage amount (Fannie Mae B7-3-02).

Fictional example

Fictional example: a Fort Worth owner refinances and the new servicer is not listed on the homeowners policy. The insurer's renewal notice goes to the old servicer. The new servicer sends the 45-day notice, which the owner sets aside, then the reminder, then places a policy. The owner calls the agent, has the mortgagee clause corrected, and sends the declarations page. The servicer cancels the force-placed policy and refunds the overlapping premium. The fix was administrative, but it cost weeks of higher escrow while it lasted.

Common mistakes

• Letting a policy lapse to save money. Force-placed coverage usually costs more and covers less.
• Ignoring the first notice.
• Assuming force-placed coverage protects your belongings like a full homeowners policy.
• Confusing force-placed insurance with mortgage insurance. One appears because hazard coverage lapsed. The other is part of the loan from the start.

If the premium on your own policy jumped, shop the policy. Do not let it lapse. The escrow analysis will reflect the new premium either way. See homeowners insurance in Texas and escrow accounts.

Next step

If an insurance problem is pushing you to refinance or sell, talk through the options before acting. Book a call, or start an application.

Related questions

• Homeowners insurance in Texas
• Escrow accounts
• Lender, servicer, and investor: who owns my loan?

Sources

Links checked Oct 21, 2026.

• CFPB Regulation X, 12 CFR 1024.37 Force-placed insurance (current text): https://www.consumerfinance.gov/rules-policy/regulations/1024/37/
• CFPB Ask CFPB, What is force-placed insurance? (retrieved Oct 21, 2026): https://www.consumerfinance.gov/ask-cfpb/what-is-force-placed-insurance-en-1617/
• Fannie Mae Selling Guide, B7-3-02 Property Insurance Requirements for One- to Four-Unit Properties (Aug 5, 2026): https://selling-guide.fanniemae.com/sel/b7-3-02/property-insurance-requirements-one-four-unit-properties
• CFPB Regulation X, 12 CFR 1024.17 Escrow accounts (current text): https://www.consumerfinance.gov/rules-policy/regulations/1024/17/

About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.

Equal Housing Opportunity.

Last reviewed: Oct 2026

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