Can You Switch Homeowners Insurance?

Homeowners can switch their insurance policies, a common practice that allows them to adapt coverage to evolving needs and market conditions. The process is manageable and can lead to improved coverage or more favorable terms.

Reasons for Considering a Change

Homeowners consider changing their insurance provider for several reasons. A primary motivation involves seeking lower premiums, as rates vary significantly between companies for similar coverage. Shopping around, particularly at renewal time, can reveal substantial savings. Dissatisfaction with existing coverage or customer service is another common reason, including slow response times, difficult claims processes, or unhelpful staff.

Changes in personal circumstances also prompt a review of insurance needs. Home renovations, such as adding a new roof or upgrading electrical systems, can reduce risk and potentially lower premiums. Acquiring new assets or undergoing significant life events like marriage or retirement can alter coverage requirements, making a new policy a better fit. Homeowners might also find their current policy over-insured or under-insured as home values and rebuilding costs fluctuate. Bundling options, offering discounts when combining home and auto policies, are another reason to switch.

Steps to Changing Your Policy

Changing your homeowners insurance policy involves several sequential actions. First, gather all necessary information for accurate comparisons and applications. This includes personal details like your full name, contact information, and Social Security number, along with the property’s physical address. You will also need comprehensive property details, such as the home’s age, square footage, roof type, construction materials, and safety features. A history of past insurance claims and details of your current policy, including coverage limits and deductibles, are also important.

Next, obtain quotes from various insurers. This can be done through online comparison tools, insurer websites, or independent insurance agents. Online quotes are often generated quickly, while agents offer a more personalized experience. After receiving multiple offers, a thorough comparison is essential for an “apples-to-apples” assessment. Carefully examine coverage limits for dwelling, personal property, and liability, along with deductible amounts and any specific endorsements.

The formal application process follows the comparison stage. Submit the application with the gathered information. The insurer will then conduct an underwriting review, assessing the risk based on provided details, the property’s loss history, and its condition. This period can range from hours to several days, potentially involving inspections. Some insurers complete underwriting within 30 to 90 days after the policy’s effective date.

Finally, cancel your old policy once the new one is in place. Coordinate the effective date of the new policy with the cancellation date of the old one to avoid a lapse in coverage. You can typically cancel your existing policy at any time, though some insurers might charge a fee. If premiums are paid through an escrow account, inform your mortgage lender, the old insurance company, and the new insurance company for a smooth transition.

Key Factors to Evaluate

Beyond the premium, several elements of a homeowners insurance policy and the insurer warrant careful evaluation. Understand the different types of coverage. Dwelling coverage protects your home’s physical structure, including attached structures, against perils like fire or hail, and should be sufficient to rebuild your home. Personal property coverage insures belongings like furniture and clothing, typically for 50% to 70% of your dwelling coverage, often including off-premises coverage. Liability coverage protects you financially if someone is injured on your property or you cause property damage to others. Loss of use coverage, also known as additional living expenses, helps cover costs if your home becomes uninhabitable due to a covered loss.

Deductibles are the amount you pay out of pocket before coverage begins for a claim. A higher deductible typically results in lower premiums, while a lower deductible leads to higher premiums. Standard deductibles often range from $500 to $2,000. Percentage-based deductibles, common in high-risk areas for wind or hurricane damage, are calculated as a percentage of your home’s insured value. Endorsements, also known as riders, allow you to add specific protections not covered by a standard policy or increase limits for certain items, such as floods, earthquakes, sewer backup, valuable articles, or identity theft.

The insurer’s reputation and financial strength are important considerations. Check ratings from independent agencies for insight into their ability to pay claims. Assess customer service quality, especially the claims process, as responsive communication is helpful. Finally, inquire about available discounts, which can significantly reduce your premium. Common discounts include multi-policy bundling, claims-free history, home security systems, new home construction, or paying your premium in full annually.