How to Change Homeowners Insurance Companies

Homeowners often consider changing their insurance providers for various reasons, seeking better coverage options, more competitive premiums, or improved customer service. Shifting market values for homes and construction materials can also prompt a review of existing policies to ensure adequate protection. Changing personal circumstances, such as renovations or new acquisitions, may also necessitate an adjustment in coverage.

Gathering Information and Understanding Your Needs

Before exploring new homeowners insurance options, gathering specific information about your current policy and home is an important first step. This preparation enables accurate comparisons and ensures any new policy meets your financial protection requirements. Your current homeowners insurance declarations page is a central document for this process.

The declarations page summarizes your existing coverage, including dwelling coverage limits, personal property coverage, liability limits, and additional living expense coverage. It also details your deductibles, any specific endorsements or riders, and the total premium amount. Understanding these figures provides a baseline for comparing new quotes, ensuring you seek comparable protection.

Insurers require comprehensive details about your property to generate accurate quotes. This includes your home’s age, construction type, total square footage, and the age and material of your roof. Information about recent renovations, the presence of security systems, smoke detectors, or sprinkler systems, and specific features like fireplaces or detached structures are also necessary. Providing a detailed picture of your home helps insurers assess risk and potential discounts.

Personal information, such as your claims history, is also relevant, as a history of claims can influence future premiums. While your credit score does not directly affect home insurance rates, insurers use credit history to generate a credit-based insurance score in many states. A higher credit-based insurance score may indicate a lower likelihood of filing claims, potentially leading to more favorable rates.

Reviewing your current coverage against your present circumstances helps determine if your existing policy still adequately protects your assets. For instance, if you have acquired valuable new possessions or made significant home improvements, your current limits may be insufficient. Assessing these needs beforehand ensures you are prepared to request appropriate coverage from potential new insurers.

Comparing and Selecting a New Insurer

Actively shopping for a new homeowners insurance policy involves obtaining and meticulously comparing various quotes to find a policy that balances cost, coverage, and service. Multiple avenues exist for securing quotes, including direct contact with individual insurers, online comparison tools, or independent insurance agents. Using different channels can yield a broader range of options.

When comparing prospective policies, focusing solely on the premium cost can be misleading. Ensure each quote offers comparable coverage limits for dwelling, personal property, and liability, aligning with your home’s rebuilding costs and personal assets. Dwelling coverage should be sufficient to rebuild your home entirely at current construction costs, not just its market value.

Deductibles also play a significant role in the overall cost and your out-of-pocket expenses during a claim. A higher deductible typically results in a lower premium but means more out-of-pocket expense during a claim. A lower deductible increases your premium but reduces your initial cost. Consider your financial comfort with these trade-offs.

Endorsements or riders are additional coverages for unique risks, such as valuable items, flood or earthquake damage, or increased liability. Evaluate if these specialized coverages are necessary for your property and possessions.

Beyond policy terms, consider an insurer’s financial strength and customer service reputation. Financial strength ratings from independent agencies like A.M. Best, Fitch, Moody’s, and Standard & Poor’s assess an insurer’s ability to meet obligations and pay claims. Checking multiple ratings offers a comprehensive view of stability. Reviews and complaint ratios also indicate customer service quality.

Many insurers offer discounts that can reduce your premium. Common discounts include multi-policy for bundling home and auto, claims-free, and those for home security systems, smoke detectors, or new construction. Some companies also offer discounts for paying the annual premium in full or for paperless statements. Inquire about all applicable discounts to secure the most favorable rate.

Formalizing the Policy Change

After selecting a new homeowners insurance policy, activate it by confirming its effective date, making the initial premium payment, and signing all required documentation. Ensure the new policy is fully in force before canceling your old coverage.

Once the new policy is active, formally cancel your existing homeowners insurance. Coordinate the effective date of the new policy with the cancellation date of the old one to avoid coverage gaps or overlapping premiums. Most insurers require written notice, often a specific cancellation form or a formal letter with your name, policy number, and desired cancellation date.

Upon cancellation, you are typically entitled to a pro-rated refund for any unused prepaid premium. A pro-rated refund is calculated based on the exact number of days remaining on the policy term. While most major insurers provide pro-rated refunds without penalty, some may apply a small administrative fee if you cancel mid-term.

If your mortgage lender manages insurance payments through an escrow account, notify them of the policy change. Lenders require continuous proof of homeowners insurance to protect their financial interest. Provide your lender with the declarations page of your new policy, which contains all necessary coverage and insurer information.

The mortgage lender will adjust your escrow account to reflect the new premium. If you receive a refund for your old policy, your lender may require the funds be credited back to your escrow account. This adjustment ensures future monthly mortgage payments reflect the new insurance cost and your escrow account maintains an appropriate balance for property taxes and insurance.