How to Switch Homeowners Insurance Companies

You can change your home insurance company, but you may face a cancellation fee if you terminate coverage before your policy ends.

Daria Kelly Uhlig
Daria Kelly Uhlig
  • Licensed Realtor with 10+ years in personal finance content

  • Contributor to Nasdaq and USA Today

Daria is a licensed Realtor and resort property manager specializing in personal finance, real estate, and insurance topics. In her spare time, she practices photography.

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Danny Smith
Edited byDanny Smith
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Danny SmithHome and Pet Insurance Editor
  • P&C license candidate in Massachusetts

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

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Updated October 27, 2023 at 12:00 PM PDT

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Homeowners insurance rose 7% in 2022, and it could increase another 9% in 2023, according to the Insurify Home Report, an analysis based on Insurify’s proprietary data.

Despite the rising costs, homeowners have been slow to shop around for a better deal. Per SafeHome.org’s 2022 Homeowners Insurance Industry Analysis and Statistics report, 43% of homeowners said their annual premiums had increased in the last year.[1] Still, just 10% planned to switch to a different insurance company in the near future.

If you’re thinking about changing insurers, don’t let escrow concerns stop you. The process can be simpler than you think.

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.[2] 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.

When can you switch homeowners insurance?

You can switch your homeowners insurance whenever you want.

The best time to make a change is when you’ve received notice that your premium is about to increase or that your coverage will change when your policy renews.

If you plan to change homeowners insurance companies at the end of your current policy’s coverage period, start shopping for new insurance right away so you can have new coverage in place before the old coverage ends, to avoid a lapse.

Pros and cons of changing homeowners insurance

While changing homeowners insurance could work in your favor, it’s not without possible drawbacks.

Pros
  • You’ll save money if you can find the same coverage for less.

  • Another company might provide better coverage or customer service.

  • If you have other policies with another insurer, switching over your homeowners insurance could earn you a bundle discount.

Cons
  • You could lose loyalty or bundle discounts you currently receive.

  • If you don’t time the transition correctly, you could have a gap in coverage.

  • Shopping for a new insurance policy can be time-consuming — especially if you’re visiting insurers’ individual websites to request quotes.

Home insurance and escrow accounts

Most homeowners pay for their homeowners insurance and their real estate taxes through an escrow account managed by their mortgage company.[3] The lender then breaks the annual insurance and tax bills into monthly payments and adds the amount to the homeowner’s mortgage payment. The lender pays the bills from the escrow account as they come due.

Even though the lender pays the bills on your behalf, you’re responsible for the payment. It’s important to log into your mortgage account regularly to keep track of your premiums and verify that they’ve been paid.

Good to Know

Knowing what you’re paying into escrow and how much is being applied to homeowners insurance is the best way to stay on top of your premiums and ensure that you’re getting the best deal.

What to look for in a new home insurance policy

Price is an important consideration when you’re shopping for insurance, but inexpensive insurance is only as good as the coverage it provides.

Before you switch, make sure the new policy offers enough protection for each type of coverage.[4]

  • illustration card https://a.storyblok.com/f/162273/100x100/c922a01b77/house.svg

    Dwelling insurance

    Dwelling insurance covers your home’s structure, attached structures such as a garage, and the home’s electrical, plumbing, and heating and air systems.

  • car in carage

    Other structures coverage

    Other structures coverage pays for outbuildings, such as a detached garage or shed.

  • illustration card https://a.storyblok.com/f/162273/100x100/32ed42213e/personal-property.svg

    Personal property insurance

    Personal property insurance covers your personal belongings, including those you keep in another location, such as a storage unit.

  • illustration card https://a.storyblok.com/f/162273/100x100/c61ab9bfc2/loss-of-use-2.svg

    Loss of use coverage

    Loss of use coverage pays your regular living expenses if a covered event displaces you from your home.

  • illustration card https://a.storyblok.com/f/162273/x/001e1e2a4c/legal-protection.svg

    Personal liability coverage

    Personal liability coverage protects you against a legal judgment if you’re found liable in a suit brought against someone who was injured or suffered personal property damage.

  • illustration card https://a.storyblok.com/f/162273/x/4c9753bdbe/medical-payments.svg

    Medical payments coverage

    Medical payments coverage reimburses the medical expenses of people who are injured while on your property.

Changing home insurance FAQs

Your homeowners insurance can have a major effect on your financial security, so it’s vital that you understand the implications before you switch. The answers to these frequently asked questions may help.

  • Will switching insurers change your mortgage payment?

    It depends. Switching insurers won’t affect the principal, interest, or property tax portions of your mortgage payment. However, if your premium changes when you switch homeowners insurance companies, you’ll see a proportionate change in your mortgage payment.

  • Can you cancel your homeowners insurance at any time?

    Yes. Just be sure to keep your existing policy until you’ve verified that the new policy is in effect. You may face a cancellation fee.

  • Do you need to tell your lender when you change homeowners companies?

    Yes. If your lender pays your insurance from an escrow account, it’ll need the new policy information to make the payments. Even if you send in the payments yourself, it’s a good idea to verify with your lender that the new policy meets its requirements.

  • How can you lower homeowners insurance costs?

    One way to lower your cost is to switch to an insurer that offers the same or better coverage for a lower price. You might be able to reduce your rate with your current insurance company by increasing your deductible, installing safety and security devices, and discontinuing coverages you no longer need.[5]

Sources

  1. SafeHome.org. "2022 Homeowners Insurance Industry Analysis and Statistics." Accessed October 17, 2023
  2. Consumer Financial Protection Bureau. "Shop for homeowner's insurance." Accessed October 17, 2023
  3. US Bank. "What is an escrow account?." Accessed October 17, 2023
  4. National Association of Insurance Commissioners. "A Consumer's Guide to Home Insurance." Accessed October 17, 2023
  5. Oklahoma Insurance Department. "5 Ways to Lower Your Homeowners Insurance Costs." Accessed October 17, 2023
Daria Kelly Uhlig
Daria Kelly Uhlig

Daria Uhlig is a freelance writer and editor with over a decade of experience creating personal finance content. Her work appears on USA Today, Nasdaq, MSN, Yahoo Finance, Fox Business, GOBankingRates and AOL. As a licensed Realtor and resort property manager, she specializes in real estate topics, including landlord, homeowners and renters insurance. In her spare time, Daria can be found photographing people and places on Maryland's Eastern Shore. Connect with her on LinkedIn.

Danny Smith
Edited byDanny SmithHome and Pet Insurance Editor
Photo of an Insurify author
Danny SmithHome and Pet Insurance Editor
  • P&C license candidate in Massachusetts

  • 4+ years in content creation and marketing

As Insurify’s home and pet insurance editor, Danny also specializes in auto insurance. His goal is to help consumers navigate the complex world of insurance buying.

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