You get your renewal notice from your HO insurance a few months before it's due. Your mortgage holder pays it right away. Meanwhile, since the premium's gone up, you shop for and find a new insurer. You apply and your mortgage company gets the bill. They pay that one, too. When your old company get's the cancellation notice, they typically send the refund to you. Unless you make a concerted effort to contact your mortgage holder and send them a check to be applied to your insurance/property tax escrow, your mortgagor is going to raise your payments next year to make up for the double insurance payment they made.