Updated June 24, 2021
Reading time: 4 minutes
Yes, you have the right to change policies anytime, but you may incur a penalty.
Changing to a new homeowners insurance company doesn’t have to be a hassle. Whether you’re looking for a lower-cost option or simply want to partner with an insurance company that fits your needs more closely, you can take control of how you insure your home. Our guide to switching coverage will show you how.
Gathering insurance quotes with tools like Insurify can help. Insurify delivers multiple home insurance rates in a few minutes, helping you weed through potential home insurers to find the policy that works for you.
The most important thing to know is that you have the right to switch your homeowners insurance company anytime you want. That said, it’s a good idea to be smart about when you make the switch.
If you’re buying a home, start looking for home insurance before you buy the house. Most mortgage lenders require you to buy homeowners coverage before closing, so you can get ahead of the requirements by starting to shop for insurance early.
If you already have coverage, you can usually change to a new insurance provider before your current homeowners insurance expires, but it could cost you in the form of penalties or cancellation fees. You can avoid these fees by switching to the new policy when your old policy expires. The policy term of a homeowners insurance policy is usually one year, and you’ll probably receive a renewal letter before the policy expires. Use the renewal letter as a reminder to review your policy, see whether the cost is changing, and determine whether you need to talk to an insurance agent about switching policies.
Ready to make the switch? Here’s how to do it.
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.
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.
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.
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.
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.
Four reasons people commonly shop for new insurance are price, discounts, better service, and additional coverage. Consider shopping around if your current insurer can’t deliver on any one of these factors.
You may receive a refund check from your escrow account at the end of the year if your new policy is cheaper than the old one. If the new premiums are higher or your state requires a minimum balance, you may owe the escrow money.
Take them with a grain of salt because people who have had negative experiences are more motivated to write reviews than people who are happy with their insurance company. The Better Business Bureau, J.D. Power, and the Property Claims Satisfaction Study are all good resources for researching a new insurance company.
Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.
Jackie's work has been cited in USA Today, The Balance, and The Washington Times.Learn More