How to Change Home Insurance Companies

Home insurance protects your dwelling, personal belongings, and provides liability coverage. Reviewing your home insurance policy periodically is a sound financial practice, as market conditions and personal circumstances evolve. Changing home insurance companies can result from seeking better rates, different coverage options, or improved customer service.

Preparing to Switch Home Insurance

Before initiating a search for new home insurance, gather all details concerning your current policy. Locate your policy declaration page, which summarizes your existing coverage limits for the dwelling, other structures, personal property, and liability. Note your current deductible amounts and any specific endorsements or riders that provide additional coverage for unique items or risks.

Beyond your existing coverage, assess any changes to your home or personal assets that might influence your insurance needs. Consider recent renovations, additions, or significant purchases of valuables that could alter the required coverage amounts for your dwelling or personal property. Changes in personal circumstances, such as establishing a home-based business or installing a swimming pool, may also necessitate adjustments to your liability coverage.

Familiarizing yourself with the core components of a standard home insurance policy is important for comparison. Policies typically include coverage for the physical structure of your home (dwelling coverage), other structures on your property (like a detached garage or shed), and your personal belongings. They also encompass liability protection for injuries or property damage you might cause to others, and additional living expenses coverage if your home becomes uninhabitable due to a covered loss.

Comparing and Choosing a New Policy

With a clear understanding of your current policy and evolving needs, seek and evaluate new home insurance quotes. Obtain quotes from multiple sources, including independent insurance agents who can provide options from various carriers, direct insurers, and online comparison tools. When requesting quotes, it is important to provide consistent and accurate information across all platforms to ensure a fair comparison of proposed policies.

When comparing the received quotes, focus beyond just the premium cost. Ensure that the coverage limits for dwelling, personal property, and liability are comparable. Pay close attention to the deductibles, which represent the amount you pay out-of-pocket before insurance coverage begins. Understand the distinction between actual cash value (ACV) and replacement cost value (RCV) for personal property; ACV accounts for depreciation, while RCV typically pays the cost to replace items with new ones of similar kind and quality without deducting for depreciation, often at a higher premium.

Review any specific endorsements or exclusions in the new policies that might differ from your current coverage. Inquire about available discounts, such as those for bundling policies (e.g., home and auto), installing home security systems, or having a claims-free history. Investigate the reputation and financial stability of each insurer by checking independent financial strength ratings and customer service reviews. This helps in selecting a policy that balances cost, adequate coverage, and reliable service.

Finalizing Your Home Insurance Change

Once a new policy has been selected, activate the new coverage and discontinue the old one. Confirm the effective date of your new policy and complete any necessary steps to bind the coverage, such as signing documents and making the initial premium payment. It is important to ensure that your new policy is firmly in place and active before canceling your existing coverage to prevent any gaps in protection.

Formally notify your current home insurance provider of your intent to cancel the existing policy. Specify the cancellation date, ensuring it aligns with or is after the effective date of your new policy. While cancellation fees are not common, some insurers might charge a small processing fee for early termination; however, if you paid your premium in advance, you may be entitled to a prorated refund for the unused portion. Obtain written confirmation of the cancellation to avoid any future auto-renewal issues.

If you have a mortgage on your home, inform your mortgage lender about the change in insurance carriers. Lenders require proof of continuous home insurance coverage. Provide your lender with the declarations page of your new policy, and if applicable, the cancellation notice from your previous insurer. If your insurance premiums are paid through an escrow account, the lender will need to update their records to direct future payments to the new insurer and adjust your monthly mortgage payment if the premium changes. Maintaining clear communication with your lender helps avoid complications, such as “force-placed” insurance, which can be more expensive and only protects the lender’s interest.