Evidence Of Insurance For Escrow

Requests for Evidence of Insurance for Escrow Closings

Brokers are not authorized by the FAIR Plan to issue on its behalf any documents, including an evidence of insurance or binder of coverage showing the existence of a FAIR Plan policy. Only the FAIR Plan can issue evidence of insurance, and this is done in the form of a Declarations Page.

Coverage does not go into effect until one day after payment has been received in the FAIR Plan office. Therefore, it is critical for new business applications to be submitted in advance of escrow closing to help ensure the timeliness of the policy.

The average escrow closes between 30 to 45 days. The FAIR Plan’s new business quotation is valid for 60 calendar days. In cases where escrow has been extended, the insurance broker should resubmit a new application to obtain another quotation before the initial quotation expires. Please note: the FAIR Plan cannot change the effective date of a new business policy to a date later than the expiration date of the initial quotation.

Existing FAIR Plan policies cannot be assigned to a new buyer. This also applies to cases where property is being transferred to a family member. A new business application must be submitted on behalf of the new purchaser, or family member(s) with insurable interest.

New Business

Following these guidelines will expedite the processing of Evidence of Insurance requests.

The web application should be submitted as early as possible to ensure that there is a valid quotation before the escrow is ready to close. Not all quotations are issued instantly, so a sufficient amount of time should be allowed.

  • Once a quotation has been issued, the quickest and most efficient way to secure evidence of insurance (proof of coverage in the form of a declarations page), is to submit a web payment. Web payments can be made by the escrow company, the broker, the applicant or any other third party. All that is needed is a valid checking or savings account.

The payment system will ask if this is for an escrow closing. If answered yes, the information will be routed for priority handling. The request for evidence of insurance from the escrow company must be electronically attached when the payment is submitted. The request for evidence of insurance should include the escrow closing date, the lender’s name and address, loan number, and the vested interest of the buyers (named insured(s) on the policy). The request should be on a document with the company letterhead of the escrow or title company.

  • If the web payment and request for evidence of insurance are received by 3:45 P.M. on a business day, a policy will be issued to serve as evidence of insurance and will be faxed to the escrow company’s fax number listed on the document that same business day.
  • Any web payments and requests for evidence of insurance received after 3:45 P.M. on a business day will be processed the next business day.
  • The earliest effective date of coverage for a new business policy is one day after the date the payment is received by the FAIR Plan. Therefore, any web payment with a request for evidence of insurance must be received at least one (1) day before the escrow closing date for that date to be honored as the effective date.

Mortgagee Change Only to an Existing Policy

  • A non money web endorsement request should be submitted via the online system. This will result in an emailed endorsement declaration with the requested change, typically within a matter of minutes.

Note: adding any comments (e.g. “RUSH”) or attaching any files WILL cause a delay in the processing of the endorsement request.

Mortgagee Change PLUS a Vesting Change, Address Modification, Coverage Change, etc. to an Existing Policy

All requests should be e-mailed to faxrouter@cfpnet.com or faxed to (213) 381-7588 or (213) 381-7792 and include the following:

  • A request for evidence of insurance.
  • Escrow closing document including the lender’s name, address and phone number, loan number, vesting for the named insured (assignment of policies not permissible), address modification, requested effective date, etc. The document should include the company letterhead of the escrow or title company.
  • Any change in coverage must include a signed request from the insured or broker with the specific changes being requested.

The request will be screened for completion and accuracy. If acceptable, an endorsement declaration will be faxed to the escrow company’s fax number listed on the closing documents, normally within two business days.

If there is a requested coverage change, an endorsement quotation will be included with the faxed documents. An endorsement declaration will be issued upon receipt of premium.

This procedure can change at any time without prior notice.

Why the California FAIR Plan is not listed in the Best's Rating Guide

The California FAIR Plan Association is a syndicated fire insurance pool comprised of all insurers licensed to conduct property/casualty business in California. The Plan was established under Insurance Code statute (Section 10091 et. al) in August, 1968 as an insurance placement facility.

All property/casualty insurers are members of the Association in compliance with insurance code statute (Section 10095a). The Plan issues policies on behalf of its member companies. Each member company participates in the profits, losses and expenses of the Plan in direct proportion to its market share of business written in the state.

The A.M. Best’s Rating Guide assigns a financial rating to all insurers with either private or public stock ownership. The financial rating is based on factors such as profitability, liquidity, adequacy of capital and surplus reserves, etc., so that the business community can determine a given company’s financial strength or weakness.

Since mortgage lenders are concerned about the long term financial strength or weakness of any insurer that is providing hazard insurance prior to their issuance of loan monies, the financial rating of a given company is one of the primary means of judging a given insurer’s viability in the marketplace.

The FAIR Plan is not a state agency, nor an insurance company. The FAIR Plan is stronger than any single insurer, since it is backed by the capital and surplus of all insurance companies writing property insurance in the state.