How to switch home insurance companies
You can switch homeowners insurance companies whenever you want, and it’s not difficult to do. Here’s how to go about it.
1. Assess your current policy
It’s a good idea to assess your current policy before you start shopping for a new insurance company. It’s especially important if you want to change insurers before your current insurance term ends because some insurance companies charge early termination fees. If yours does, your policy will say so.
Next, make note of the different insurance coverages you have and any limits on their reimbursement. Also, pay attention to how much you’re being charged for each. If you’d like to increase or add coverage, make note of that, too, to help you shop for a new policy by doing an apples-to-apples comparison.
If you have any questions about your policy, your insurance agent can answer them for you.
2. Decide if it makes sense to switch home insurance companies
Whether it makes sense to make a switch is a highly subjective decision, even in an economic climate where prices are steadily increasing. Shopping around to compare quotes from multiple insurers will help you make the right decision.
If switching could achieve any of the following, it might be the right time to switch:
You can get the same, or even better, coverage for the price you’re paying now — or less.
Your current homeowners insurance policy’s limits or exclusions are less than your home value or the value of your belongings.
You acquire a dog your current insurer excludes from liability coverage.
3. Compare homeowners insurance quotes
Comparing quotes is the best way to confirm that you’re getting the best deal on the coverage you need — or that another insurance agency doesn’t offer you more for less.
The fastest way to compare policies is to go online to request quotes. You can do so by going to different insurers’ websites individually or using a price-comparison platform.
Most forms will ask for your contact information and information about who lives in your home and whether you run a home-based business. It might also ask about your current policy, your claims history, and information about your home’s structure, style, and size, as well as any improvements you’ve made and safety devices you’ve installed.
Keep in Mind
Look not only at prices but also at the precise coverages each company offers, along with policy limits, to make sure the policies you’re pricing truly are comparable. Also, look at deductibles, and check how changing them changes the offered rates.
4. Buy your new policy
Before you buy a policy, the Consumer Financial Protection Bureau recommends running it past a loan officer at the financial institute that services your mortgage loan. The policy must meet the lender’s requirements. Otherwise, it could violate the terms of your mortgage loan.
You can purchase the policy as soon as you have the mortgage lender’s OK. Read the policy one final time to make sure you understand the coverages, limits, and exclusions before — or contact the company to speak with an insurance agent who can answer your questions. Then follow the quote’s instructions for completing the purchase.
You might be able to complete your purchase simply by clicking an “accept” button on the website and providing payment information.
5. Cancel your old policy and notify your lender of the change
After confirming that your payment has been accepted and the new policy is active as of the effective date, go to your account on your old insurer’s website or call the insurance agency directly to cancel the policy. The company will refund unused premiums you’ve paid if you’re canceling before the end of the policy term.
Next, call your lender to provide your new policy information.