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As a homeowner, you may be wondering if you have the freedom to switch property insurance companies whenever you want. The short answer is yes, you can. However, there are a few things to consider before making the switch. There can be penalties for terminating active  policies early, but they can be avoided with careful planning. Careful comparison of old and new policies, understanding any cancellation fees and ensuring no lapses occur in coverage can make the process of switching home insurance carriers smooth and beneficial.

Can I switch home insurance at any time?

Yes, you can change your homeowners insurance carrier at any time — but you may want take a moment to consider the potential consequences of doing so. First, depending on your carrier and policy, you may be charged a cancellation fee for terminating coverage before the end of the policy term. Second, a lapse in coverage may increase your insurance rates and leave you without financial protection for your home, so you’ll likely want to ensure you have a new policy in place before the old one ends.

If you’re considering making the switch because you found a cheaper home insurance policy, you may want to speak to your current provider before finalizing any changes. In some scenarios, it may be more cost-effective to wait until the policy renewal date before changing companies.

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What information do I need to gather before comparing homeowners insurance quotes?

When getting a quote for home insurance, it’s important to have the following information on hand:

  • Your personal details: Name, property address, birth date and the date you want the coverage to start.
  • Home details: The number of full-time residents and whether it’s your main residence. If it’s a secondary or seasonal home, the number of weeks it’s occupied per year. You might also want to create a home inventory.
  • Security features: Details about deadbolt locks, fire extinguishers, sprinkler systems, and any fire or burglary alarm systems you have installed.
  • Building details: The year your home was built, total finished square footage, number of floors, any solid fuel appliances and any separate buildings on your property. You also need to disclose unique features of the property, such as an in-ground swimming pool or tennis court.
  • Insurance history: Any claims you’ve made in the last five years, your most recent property insurance provider and the dates of your last coverage period.
  • Fire protection information: How close fire services are to your home, whether your home is outside city boundaries and the distance to the nearest fire service.
  • Additional coverage needs: Any specific items like home computers or jewelry that may require higher coverage limits.

How often should I change homeowners insurance companies?

It’s recommended to review and reassess your homeowners insurance policy every one to two years, especially if there’s been an increase in your premium or any changes in your policy or personal circumstances that could affect your rates. Regularly doing this can help ensure you’re receiving the best value and coverage for your home.

How to change home insurance companies

While it may seem daunting, changing your home insurance company is actually pretty straightforward. To do so, you could follow these seven steps:

1. Decide whether switching home insurance is the right choice

There are a number of reasons you might want to know how to switch insurance. You may decide to switch to bundle your auto and home policies with one insurer, expand your home insurance coverage with another carrier’s endorsements or find a carrier with more robust digital tools.

Another common reason to switch may be cost-related. A quote from a different provider for the same level of coverage could be significantly lower. However, most insurance professionals recommend carefully comparing quotes before you switch carriers. Another carrier’s lower quote may be due to lower coverage limits or reduced coverage types. Before you switch homeowners insurance companies, you might want to review your situation with a licensed insurance agent to ensure you’re still getting the coverage you need.

2. Compare ratings

Third-party ratings may help you decide if a company will meet your needs. For example, you could look at customer satisfaction ratings from J.D. Power and the Complaint Index from the National Association of Insurance Commissioners (NAIC) to decide if a company’s level of service is equal to what you are looking for.

Financial strength ratings may be helpful metrics to consider as well. Companies like AM Best and Standard & Poor’s (S&P) assess the historical financial strength of insurance companies and assign each company a proprietary rating. These ratings might help you get a sense of a company’s historical ability to pay out claims, especially after a catastrophic large loss event like a hurricane, tornado or wildfire.

3. Compare your current policy to the new policy

Before switching insurers, most home insurance professionals recommend reviewing your old policy and your potential new policy to make sure you understand what you are purchasing and what you are leaving behind. It may help to read through both quoted home insurance policies and look for the following:

  • Check the policy limits: You may want to make sure you are aware of how the coverage limits change, especially since property insurers have their own way of calculating your dwelling coverage amount. This calculation will appear on your policy as your Coverage A amount and impact several other coverage limits on your policy. It’s important to ensure your coverage limits reflect current replacement cost value. According to an analysis by the Insurance Information Institute, cumulative replacement costs for homes have increased 55 percent since 2020 due to escalating costs of construction materials and labor.
  • Look for exclusions: The terms and conditions may reveal exclusions or hazards not covered in the new policy. Most home insurers exclude flood and earthquake coverage in a standard homeowners insurance policy, but some insurers may have additional exclusions, such as exclusions for certain dog breeds.
  • Check your endorsements: Endorsements are add-ons that increase or broaden your coverage. Not all companies offer the same endorsements, so you may want to be aware of how these riders differ between your quotes so you know if you’re losing or gaining coverage.
  • Compare deductibles: The deductible is the amount of money you agree to pay if you file a claim; it’s essentially the portion of a loss that you are willing to assume. You could save money if your deductible is higher, but most insurance professionals recommend choosing a deductible you can afford to pay with little notice. It’s also worth noting that hurricane-prone states have a separate deductible for windstorm damage for named storms. In addition, tornado alley states have a separate wind/hail deductible.
  • Review your coverage type: There are several different types of home insurance policies, and each type differs in how your coverage is handled. Getting a quote for the same type of coverage may help you more accurately compare rates. For example, if you are comparing replacement cost coverage to actual cash value coverage, you may notice a price difference, but it’s really because the coverage type is different.

Remember that the best home insurance company for one person isn’t necessarily the best company for everyone. Needs vary, and working with a licensed agent might help you find the right fit for your situation.

4. Look at your current policy’s effective dates

It may be important to review your current policy’s homeowners insurance declarations page to find out when your coverage ends. If you cancel your old policy before coverage begins on the new one, you could end up with a lapse in coverage. Lapses can result in higher premiums. Even worse, if you suffer a loss while your coverage has lapsed, you will have to pay 100 percent out of pocket (and if you try to file a claim retroactively, it is considered insurance fraud). In addition, a mortgage company could purchase coverage on your behalf — called force-placed insurance — and pass the premium on to you in your monthly mortgage payment.

5. Buy the new policy

Once you know the newer quote works for you, it may be time to buy the new home insurance policy. You will be asked for an effective date for your new policy. You can set up your new policy to go into effect the same day as your current policy ends. However, most insurance professionals advise against canceling your current coverage before your new policy’s effective date. For example, if your current policy ends on June 30, you could set your new policy’s effective date to June 30. This prevents you from paying for duplicate coverage and from experiencing a lapse in coverage.

6. Notify your existing home insurance company

Once you have started or scheduled your new policy, it is likely time to contact your existing home insurer or agent and cancel your current policy. You’ll need to provide the cancellation date and you might need to sign a form to authorize the cancellation.

If you cancel your policy on its renewal date, you likely won’t have a refund since all the premium was used up. If you cancel mid-term, though, you might get money back depending on how you pay.

7. Contact your lender

If you have a mortgage, you will likely need to keep your lender in the loop. If you pay for your homeowners insurance directly, you could call your lender to notify it you have switched insurance companies. You may need to email your mortgage company a copy of your new homeowners insurance declarations page.

How to change homeowners insurance policies with an escrow account

If you have a mortgage with an escrow account, the process looks a little different. Switching your homeowners insurance when you have an escrow account can be seamless with the right steps:

  1. Start by shopping for a new policy. Understand your coverage needs and the features you’re looking for.
  2. Verify the mortgagee clause for your lender. Your new policy should have the correct information; some companies have a specific mailing address for insurance-related documents.
  3. Purchase your new policy, ensuring the mortgagee clause is correct.
  4. Cancel your old policy. Make sure the cancellation date aligns with the effective date of your new policy to avoid a lapse in coverage.
  5. Inform your mortgage lender about the change, providing all necessary details about your new policy. The lender should receive a cancellation notice from your prior insurer and a declaration page from the new insurer, but letting your mortgage company know directly about the change might help forestall any complications.
  6. If you receive a refund on your premium, redirect it to your new escrow account to avoid any escrow shortage that could increase your mortgage payments. If you do not repay your escrow, your mortgage lender may not have sufficient funds to pay the new policy, which could result in an increase in your monthly mortgage payment to rebuild the escrow account.

Keeping both your mortgage company and insurance providers well-informed ensures a smooth transition.

Frequently asked questions

    • Typically, homeowners switch insurance companies in order to save money, but this isn’t always the case. If you’re switching companies to obtain a more robust policy or work with a company with better customer service or digital tools, you may be paying more as a result of the switch. Adding coverage types or expanding your coverage limits typically results in a higher premium, but this may not be the case if the new company has substantially lower rates or offers more applicable discounts. The best way to evaluate whether you will pay more with a new insurance company is likely to review your new quote carefully to see how the premium, coverage options, coverage limits, deductible and discounts stack up against your existing company.
    • The homeowners insurance declarations page is the condensed version of your policy that includes your basic policy information. This typically includes your coverage limits, deductible amount, selected endorsements, policy effective and expiration dates, policy number, your name and address, and the name and address of the insurance company. This information will also be explained in more detail if needed in the insurance policy. The declarations page also includes information on how to file a claim.
    • Yes, but it’ll depend on the status of your home insurance claim. If your claim is still in an “open” status — meaning it isn’t fully resolved yet — you probably won’t be able to change companies. Once a claim is closed, you may be able to switch companies more easily, but keep in mind you won’t be able to “get rid” of your claim by going to a new company. Insurers run Comprehensive Loss Underwriting Exchange (CLUE) reports, which gives them access to up to seven years of your prior claims history. Regardless of what company you were with at the time of the damage, a claim may influence your new insurance premium or eligibility with another company.
    • There are a lot of reasons you might want to switch your home insurance. You might find a lower price, better coverage or an endorsement or discount you were looking for. You might even switch based on the service you receive from your insurer or for a feature like a mobile app. Whether or not it’s a good idea will depend entirely on your circumstances. If you aren’t sure if you should switch, it may help to talk to an independent insurance agent. These agents contract with multiple insurance companies and may help you evaluate your situation and shop for new coverage by obtaining multiple quotes.