Escrow your insurance payments with your mortgage payments

Sometimes we hear words enough that we know we should learn the meaning. Escrow is one of those words that everyone seems to bandy about assuming the definition is common knowledge. Most people do not know that there are two types. Both of types of escrow help you with your home and your insurance payments should be in escrow to make life much easier.

Buying a home

A third party handles escrow during the process of acquiring a home. Unlike the movies where the buyer and seller shake hands, and the deal is done, the real world requires a spacing time a few essentials such as an escrow. The real estate transaction protects both sides until all terms are agreed upon by the third party. This can be anything from making sure the furnace is up to code or that central air be installed. Bundled money shows the seller that the buyer is serious, and it demonstrates that the purchaser will have their terms agreed to, or the money will be deducted. It is an excellent financial buffer for both sides.


Lender’s protection

A bank will give a homeowner the opportunity to pay their taxes and insurances via escrow. This arrangement is to help both parties protect their joint investment. A home is subject to fire and regional weather events. It is also subject to fluctuations in insurance rates and hikes in property taxes. Those that pay insurance via escrow know that that if wild fluctuations occur, they will be protected.


Pay via escrow

When bills are due every month, we might have the money automatically deducted from our checking accounts. Payments made once or twice a year can get trickier. A cell phone bill is due every month as is the mortgage payment. They are, therefore, easier to budget for and expect. Property taxes and home insurance may be substantial and paying them both at once annually can be quite the financial uphill challenge. The best way to counteract this is to pay monthly with your mortgage payments with the ease of an escrow account.


A smarter decision

Monthly payments are easier to budget for than one made annually, particularly one that is prone to fluctuations. Property taxes may increase to fund the building of a local public school. Home insurance rates jumped after Hurricane Katrina. Miami auto insurance can have fine print regarding weather readiness that all forms of insurance want to protect their investments. Insurances always want to protect their investment and with so many variables in place, escrowing insurance payments makes financial sense. You cannot control the weather, but each month you can manage your bill payments.



We all wish there was a reward for paying on time. Paying your insurance with your escrow means that if the financial pillow you have provided overpays and there is a surplus, a check can be cut for you. Additionally, if you want to keep the surplus in escrow, it can be added for when unexpected price increases happen. In other words, you will always have that extra coverage and the peace of mind you will not receive a whopper of a bill unexpectedly.



Life can be uncertain in so many ways. Escrows provided a financial cushion in case of weather events or increases in property taxes. Prevent any financial challenges by paying your insurance via escrow.

Add Comment