What is Escrow?

Escrow can be used in many contexts including law, banking, intellectual property and internet purchases. Escrow is also related to your homeowner’s insurance. According to Wikipedia, “an escrow is a trust account held in the borrower’s name to pay obligations such as property taxes and insurance premiums….specifically in mortgages where the mortgage company establishes an escrow account to pay property tax and insurance during the term of the mortgage.”

It is important to make sure your insurance agent knows if your mortgage is escrowed or not. This will help us to avoid billing and cancellation issues. It is also critical to inform your agent when you finish paying your mortgage so that we can remove the Mortgage company from your policy. Heaven forbid, you have a loss and the insurance company prints a check with your name and the name of your former bank!

Escrowing your account can be very convenient but it’s not something you want to set and forget. Do check-in from time to time with your bank and insurance company to make sure things are running smoothly.