let the mortgage holder know?? it is not escrowed into our mortgage but do i need to notify the bank or anything like that?

The mortgage holder needs to know. Depending upon which insurance company you select, that company may not have a "A.M. Best" rating and the mortgage holder might not accept the policy if the rating is low or if there is no rating. It is best to buy insurance from a Nationally known company and you won't have a problem.