How To Switch Homeowners Insurance Companies

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Having homeowners insurance is an essential part of owning a home. But if you’re unhappy with your current company—or want to find a better deal—you can switch homeowners insurance companies at any time. You don’t have to wait until it’s time to renew your policy, although it may be beneficial to do so.

Should I Change Homeowners Insurance Companies?

Having the best homeowners insurance coverage is important. So is working with an insurer that meets your expectations.

Here are some reasons you may consider changing homeowners insurance companies:

  • Inadequate coverage
  • Increasing premiums
  • Lack of discounts
  • Life changes, such as moving to a new house
  • Poor customer service
  • Want to bundle policies from the same company, like home and auto insurance

Changing home insurance companies isn’t difficult, but there are some things to keep in mind. These steps can help you find the best insurer and coverage, and make a seamless switch.

1. Review and Evaluate Your Existing Home Insurance

Before you begin your search for a new homeowners insurance company, read your current policy’s declarations page, which details your coverage. Take note of your various coverage limits as well as your deductible, so you can compare these limits to quotes from other insurance companies for the same coverage.

As you evaluate your existing policy, look for potential gaps in coverage. You may find you need more coverage, not less, even if you are looking for ways to save.

Here are the coverage types included in a standard homeowners insurance policy.

Dwelling coverage

Dwelling coverage pays to rebuild or repair the physical structure of your house if it is damaged or destroyed by a problem covered by your homeowner insurance policy.

Problems covered by a standard home insurance policy include damage by falling objects, fire, freezing, hail, lightning, smoke, theft, windstorm and vandalism. The most common type of insurance, often known as an HO-3 policy, covers your house for all problems except those that are specifically excluded, such as floods and earthquakes.

You can buy a separate earthquake insurance or flood insurance policy.

You should determine the dwelling coverage amount you need by how much it would cost to rebuild your house, not by its market value. This is important because you don’t want to end up underinsured if your house is destroyed. Your insurance agent can help you identify the right dwelling coverage amount.

Other structures coverage

This coverage pays for damage to structures not attached to your house, such as fences, unattached garages and sheds.

Personal property coverage

Personal property coverage covers your belongings, such as jewelry, furniture, clothing, appliances, electronics and even the knick-knacks on your shelves.

Most home insurance policies set coverage for personal property at 50% to 70% of your dwelling coverage amount, but you can buy more personal property coverage if needed.

It’s a good idea to take a home inventory to determine how much personal property coverage you need.

Loss of use coverage

If a problem covered by your home insurance renders your home unlivable, loss of use coverage—or additional living expenses (ALE) coverage—can help.

ALE pays for extra expenses, such as a hotel and pet boarding, if you need need to temporarily move out of your house while it is being repaired. ​​This coverage is often set at a certain percentage of your dwelling coverage, but you may be able to increase the coverage limit.

Pay extra attention to the parameters of your ALE coverage if you live in an area where natural disasters are common.

Medical payments to others coverage

If a guest is hurt on your property, “medical payments to others” coverage can pay for treatment for their injuries. This coverage is usually sold in a small amount, often between $1,000 and $5,000. More expensive injury claims fall under your liability insurance.

Liability insurance

Liability insurance covers unintentional injuries and property damage to others that you or a member of your household are responsible for. It also covers your legal defense and any settlements or judgments if you’re sued following the accident.

Your liability coverage should be enough to protect all of your assets in case you are sued cover a large accident.

A lawsuit could quickly drain your bank account. If the current amount of liability insurance you have is less than your net worth, or what you could lose in a lawsuit, it’s probably time to increase your coverage.

Related: How much homeowners insurance do you need?

2. Gather Information

When you’re ready to compare homeowners insurance quotes, you’ll need to gather specific information. To make the process go smoothly, have these details on hand:

  • Personal information, like your Social Security number and contact information
  • Current or desired coverage amount and deductibles
  • Square footage of your dwelling
  • Year the home was built
  • Age of your roof, if available
  • Any installed safety features, including sprinklers
  • Details about your home’s features, such as the types of heating or cooling systems
  • Information about any renovations, such as a new roof or finished basement

Some of the information will be used to determine the cost to repair or rebuild your home. Other details, like safety features, can help a potential insurer determine if you’re eligible for homeowners insurance discounts.

Most insurers offer discounts to policyholders who purchase more than one type of insurance. If you’re considering bundling your home and auto insurance, it’s also a good idea to have your current car insurance policy on hand.

3. Get Quotes and Compare Home Insurance Companies

Rates can vary greatly among companies, so it’s important to compare quotes from at least three insurers. Insurance quotes are always free.

You can get quotes online or through a local agent. An independent insurance agent can give you quotes from multiple companies, which will save time.

How to compare homeowners insurance companies

While important, quotes aren’t the only factor to consider when comparing homeowners insurance companies. It’s also important to consider the company’s reputation and customer service, types of coverage available and the company’s financial stability.

If you’re a dog owner, and your dog’s breed is known to be aggressive, verify that a potential insurer will cover the dog.

Related: Dog breed banned by homeowners insurance companies.

4. Purchase a New Home Insurance Policy and Cancel Your Old One

You may be able to purchase a new policy immediately after getting a quote.

Don’t cancel your current homeowner insurance policy before purchasing a new one, and make sure the new policy’s effective date is on or before your current policy’s cancellation date.

It’s important to make sure you don’t have a lapse in coverage. If you cancel your existing coverage before your new policy goes into effect, you will not be covered if an issue occurs.

Related: What To Do If You’re Dropped by Your Home Insurance Company.

5. Contact Your Lender

If you have a mortgage, you should contact your lender to inform it of your homeowners insurance policy change. Most lenders require home insurance, and keeping the lender up to date will help you avoid complications.

For example, if your homeowners insurance is paid through an escrow account, and your lender manages that account, they’ll need to know where to send payment.

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How to Switch Homeowners Insurance Companies FAQ

How often should I change homeowners insurance companies?

You can change your homeowners insurance company as often as you’d like, but your existing policy may include a penalty for canceling early.

It’s a good idea to check with your current insurer before switching to understand if there’s a financial advantage to waiting until your renewal date to change companies.

If you switch your home insurance company, make sure your new policy covers all of your needs, including sufficient insurance limits for your house, belongings and liability coverage.

Can you cancel your homeowners insurance at any time?

Yes, you can cancel a home insurance policy any time. Your homeowners insurance policy does not have to expire before you change insurers, but it may be beneficial to switch insurance companies at renewal time.

Review the terms of your current policy. You may be subject to an early cancellation fee if you cancel mid-term, or you could be eligible for a refund for the months remaining on your policy.

How do you lower the cost of homeowners insurance?

Shopping around and comparing home insurance quotes and coverage can help ensure you are getting the lowest homeowners insurance rate for the coverage you want.

Other ways to help lower your home insurance costs include:

  • Asking your insurer if you’re eligible for homeowners insurance discounts, such as discounts for retirees and adding safety devices such as an alarm system.
  • Bundling your home and auto insurance with the same insurance company.
  • Increasing your home insurance deductible or decreasing your coverage limits. Both of these options may seem beneficial in the short term, but could leave you underinsured if you experience a loss. It’s best not to skimp on coverage if you can afford not to.

Do you have to have homeowners insurance?

If you have a mortgage, most lenders require that you purchase homeowners insurance as a part of your lending agreement. If your house is paid off, homeowners insurance is still a good idea to protect your investment and assets.

If you live in a disaster-prone area, it may also be wise to purchase additional insurance, such as flood insurance or earthquake insurance.

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