Paying off a mortgage or car loan can lead to a short term feeling of euphoria. Don’t let that feeling later change to one of frustration. That can happen if your lender’s name isn’t removed from your home or auto insurance policy. Here’s something we see often. Someone gets a claim check on their house or car which includes the lender’s name as a payee, even though the loan was completely paid off. People then have the hassle of either getting the lender to endorse the check or having to wait for the check to be reissued.
In a perfect world, lenders would notify insurance companies when loans are repaid and policies would be endorsed to remove the lender as an interested party. In the real world, many lenders don’t consistently do this. We frequently see lenders listed many years after a loan has been repaid. Our best advice is to assume your lender isn’t going to notify the insurance company and do it yourself. One quick phone call is all it takes and it could save days of delays and frustration later.
Blog Authored By: Ken Mogren, CPCU