Glossary

Force-placed insurance

Coverage a mortgage servicer buys on your home and bills to you when it believes your own policy has lapsed or falls short of loan requirements.

Also called: lender-placed insurance, lender-placed hazard insurance, creditor-placed insurance

Force-placed insurance is a policy the lender or servicer buys to protect its collateral when it has no proof that you carry adequate coverage. It usually follows a lapse, a missed premium, a nonrenewal or an escrow mix-up. The coverage is generally limited to the building. It protects the lender's interest and typically gives little or nothing for your belongings, living expenses or liability, yet it often costs much more than a policy you would buy yourself.

Federal servicing rules (Regulation X, 12 CFR 1024.37) set a process. The servicer must have a reasonable basis to believe you lack coverage, send a written notice at least 45 days before charging you, and send a reminder at least 15 days before the charge, and not sooner than 30 days after the first notice. If you then show proof of coverage, the servicer must cancel the policy and refund any overlapping premium. States may add their own rules.

If a notice arrives, act at once. Send your declarations page or evidence of insurance to the servicer, and ask your agent to confirm the lender's address on file. See force-placed (lender-placed) insurance explained and what mortgage lenders require from your homeowners policy.

Last reviewed October 10, 2026

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Related terms

Mortgagee The lender that holds the mortgage on the home, listed on the declarations page so it gets cancellation notices and shares in payments for dwelling damage. Escrow account A lender-held account that collects a share of your annual property tax and insurance bills with each mortgage payment and pays them when due. Cancellation The ending of a policy before its expiration date, either by the homeowner at any time or by the insurer for reasons the policy and state law allow. Nonrenewal An insurer's decision to end coverage at the end of the policy period by declining to offer another term, as opposed to ending it partway through. Evidence of insurance A short document from your insurer or agent confirming that a policy is in force, with its limits and the lender to notify. It is not the policy itself.

Related guides

How to cancel homeowners insurance and get a refund Cancel in writing with a date, tell your lender, and expect the unused premium back pro rata unless a short-rate rule applies. Steps, deadlines, late refunds. Cancellation for nonpayment and reinstatement The standard ISO form allows cancellation for unpaid premium on 10 days' notice. Notice rules, payment timing and reinstatement decide whether you get a gap. Class actions against home insurers How class actions against homeowners insurers work, the labor depreciation cases that shaped them, what a settlement notice means, and when you should opt out. How escrow pays your homeowners insurance How a mortgage escrow account collects and pays your homeowners premium: the monthly math, the one-sixth cushion, the annual analysis, and dropping escrow. Escrow shortages after a premium increase Why a higher home insurance bill creates an escrow shortage, the federal rules on how fast your servicer can collect it, a worked example, and what to do. FHA, VA and USDA homeowners insurance requirements What FHA, VA and USDA loan rules say about homeowners and flood insurance: who picks the insurer, how much coverage, escrow, and what the lender may not demand.

Related insurers

Assurant The leading U.S. writer of lender-placed (force-placed) home insurance, which also sells manufactured home, condo and homeowners policies in select states.

Related tools

Escrow shortage calculator See how a higher homeowners premium raises your mortgage payment twice, once for the new premium and once to repay the escrow shortage. Nonrenewal action plan Turn a nonrenewal notice into a dated plan: what to do now, where to look for coverage, and what your state offers when no private insurer will write you.