When it comes to homeowners insurance, one of the most common questions we hear at Eugene C. Yates Insurance Agency is:
“Can I pay my own homeowners insurance, or does my mortgage company have to do it?”
The answer? Yes, you can pay your own homeowners insurance—under certain conditions.
Let’s take a look at when you can, when you can’t, and whether it’s the right choice for you.
🏡 What Does It Mean to “Pay Your Own Homeowners Insurance”?
If you’ve ever had a mortgage, you’ve likely encountered an escrow account. This is a special account set up by your lender to collect:
- Monthly homeowners insurance premiums
- Property taxes
Your lender then pays these bills on your behalf. However, some homeowners prefer to opt out of escrow and pay their insurance directly to the provider.
✅ When You Can Pay Your Own Homeowners Insurance
1. You Own Your Home Outright
If your mortgage is paid off, congratulations! You can:
- Choose your insurer
- Pay premiums on your own schedule
- Change or cancel your policy whenever you want
There are no lender requirements standing in your way.
2. You’re Approved to Waive Escrow
If you still have a mortgage, your lender might let you manage your insurance independently if:
- You have a strong credit score
- Your loan-to-value ratio is low (typically 80% or lower)
- You have a consistent on-time payment history
You’ll usually need to submit a formal request and show proof that you can responsibly handle the payments.
🏦 When Your Lender Pays (Escrow Required)
In many cases—especially for new homebuyers—lenders require you to use an escrow account. This is particularly common for:
- FHA and VA loans
- Loans with less than 20% down
- High-risk borrowers
Why? Lenders want to ensure your home stays protected by an active insurance policy—after all, your house is their collateral.
🔁 Can I Switch From Escrow to Paying It Myself?
Yes, but only if your lender allows it. The process typically involves:
- Making a written request to remove your escrow account
- Meeting eligibility criteria (credit, equity, payment history)
- Paying any escrow balance or shortage
- Providing proof of an active homeowners insurance policy
Keep in mind: not all lenders permit this, and some charge a fee to waive escrow.
✅ Pros of Paying Your Own Insurance
- More control over how and when you pay
- Easier to shop around and switch insurers
- Avoids escrow shortages or unexpected increases in monthly mortgage payments
⚠️ Cons of Paying It Yourself
- You must remember to make timely payments
- A missed premium can lead to policy cancellation
- Your lender could impose force-placed insurance, which is much more expensive
- You may lose the convenience of one bundled monthly payment
🧠 Is Paying Your Own Homeowners Insurance Right for You?
It depends. If you’re financially organized, value flexibility, and want full control of your insurance decisions, paying on your own might be the perfect fit.
But if you prefer the simplicity of automatic payments and don’t want to worry about due dates, escrow may be a safer option.
🏠 Need Help Navigating Homeowners Insurance Options?
At Eugene C. Yates Insurance Agency, we’ve been helping Sacramento homeowners find the best insurance plans—and understand their payment options—since 1946. Whether you’re managing your own policy or working through escrow, we’re here to help you find affordable, reliable coverage tailored to your needs.
📞 Call today to speak with a local agent
💻 Or get a free, no-obligation quote online in minutes
Eugene C. Yates Insurance Agency
Your Sacramento Insurance Experts Since 1946
Local. Trusted. Affordable.