Most people don't have their auto and home insurance on the same date. I don't! I started my auto policy in April and bought a house in June, so the two policies have different start dates.
Let's pretend tomorrow a terrible thing happened. I get my renewal in, and it's HORRIBLY EXPENSIVE! I get into the office and immediately start looking at other companies. When I look at them, they all want a package. 20% discount if I bring my auto and home together. GREAT! I do that!
I'm happy, I'm saving money, I go through and click all the buttons, I'm done with my auto and I'm excited. I start on my home, saving money, clicking buttons, and then I get to the mortgage page.
As a homebuyer who does not pay my taxes and insurance out of pocket, I have an escrow account. An escrow is where a portion on my monthly mortgage goes to paying the taxes and insurance based on what I paid last year plus a little cushion they build into the escrow.
When I switch my homeowners insurance mid term, an interesting thing happens.
Your old insurance company will send you a refund for any unused premium BUT your new insurance company will send a bill to your mortgage for the full year premium. Your escrow essentially paid a year and a half of insurance in one year. So, if you do nothing, it will increase your mortgage the next year to make up the deficit. So, you need to take your refund you received back to your escrow account and pay it back. By paying back the refund, you keep your escrow square and you'll see the savings on the mortgage the next year.
This is VERY important, so I'll say it again. If you want your mortgage to lower with your new insurance premium, you have to take your refund from the old company back to the escrow and repay it.
I know, no one wants to give away free money, but you'll like it the next year, I promise!