How to Change Home Insurance Companies
Ready to make the switch? Here’s how to do it.
1. Review Your Existing Policy
There are a few things you need to look for in your existing policy. First, look at the terms and conditions in your current policy if you’re terminating the contract early. If you’re not sure about the effective dates, check the declarations page.
You also need to know the basic parameters of your policy, such as the annual premium, coverage amounts, and deductible. This will help you compare your current policy to any new policies you find.
If you can’t find what you need, call your insurance company and ask them for help.
2. Think About What You Need
Evaluate your current insurance in depth. Have your coverage needs to be changed since you last signed up for a policy? Spend some time figuring out how much coverage you need so you know what to look for when you compare new policies.
3. Research Insurance Providers
Make sure your quotes for new coverage have the same coverages, limits, and deductibles as each other so you can compare apples to apples. Compare them with your current coverage as well to see whether it makes sense to switch. Remember, the homeowners insurance premium isn’t the only thing that matters—you should also consider other important things, like the reputation of the company.
Get quotes from at least three other insurance carriers. See how they compare, not only in the cost of the premium but in additional perks. For example, some companies offer free identity theft insurance bundled with their homeowners insurance.
Research how customers feel about your potential new insurers by reading plenty of reviews, though it’s key to remember that happy customers often don’t take the time to write a review.
4. Notify Your Lender
You don’t have to tell your mortgage servicer before you change insurers, but it’s a good idea to go ahead and clue them in. They can tell you what to expect from the rest of the process and help make sure you have adequate coverage the whole time. They have a vested interest in making sure the new policy will pay enough to replace your home if something destroys it.
If you’ve already switched and didn’t tell your lender, you can still fix the issue. Send the mortgage company a copy of the new homeowners insurance policy ’s declarations page and written notice that you canceled the old policy, and do it as soon as you can so their records are up to date. If you have an escrow account, it’s very important that the account is directing the homeowners insurance payments to the correct insurer.
5. Start the New Policy and Cancel the Old One
Schedule your new policy ’s start date to begin before you cancel the old one. This helps you avoid a lapse in coverage, which could be catastrophic if something happens in the period between stopping the old policy and starting the new one.
Notify the old insurer and get a confirmation that your policy is ending, either a cancellation notice or a statement that the policy won’t be automatically renewed. You should also ask the old insurer whether you’re entitled to a refund—this could be the case if you paid your policy in advance and now you’re canceling before the term has expired. Don’t spend it right away, though, because you may need to put that money back in your escrow account to help pay for the new policy.
