![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/how-to-change-home-insurance-switch-666x381.jpg\")
<\/a>Decide why you want to switch<\/h2>\n
There are several valid reasons for wanting to switch up your home insurance policy. Ask yourself:<\/p>\n
- \n
- Are you hoping to save money<\/a>?<\/li>\n
- Will another company offer bundling discounts?<\/li>\n
- Do you want to change your level of coverage?<\/li>\n
- Do you want better customer service?<\/li>\n
- Does a different policy offer other features?<\/li>\n<\/ul>\n
Richmond-Young recommends reviewing your homeowners insurance policy every six to twelve months, or after any national weather disturbance. In her experience, some insurance companies will put the burden of natural disasters on customers throughout the country.<\/p>\n
\u201cYou, the insured, could incur a price increase because of something that happened miles or states away from you,\u201d she says. \u201cI think that is a good time to review other options.\u201d<\/p>\n
With that advice in mind, watch for price increases that seem out-of-line with normal inflation.<\/p>\n
Weigh the downsides of switching<\/h2>\n
Before you switch, be aware that many insurance companies offer loyalty discounts<\/a> for long-term customers \u2013 sometimes adding up to a 24% savings. Keep in mind that longevity with the company (and therefore your loyalty discounts) would reset upon changing.<\/p>\n
In addition, Turner cautions that sometimes making a change to your insurance can end up being more costly in the long run. When you make a home insurance switch, the new carrier often requires professional inspections, which can run between $85 and $150. They will probably also send a company representative out to your property, who could demand repairs or even cancel the new coverage. In the case of older homes, sometimes it\u2019s best to stick with the current insurance carrier rather than risk this kind of scrutiny.<\/p>\n
Turner says, \u201cBe mindful about the age and condition of your home and its systems before you switch \u2013 particularly your roof. If your new home insurance carrier determines that your roof, water heater, HVAC unit, or electrical systems are beyond their useful life or are no longer in good working order, they will look to cancel your policy within the 30-to-90 day binder period. They may also require you to trim back trees, fix cracks in your driveway, fill in cracks in your stucco, or even clean off mildew.\u201d<\/p>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/how-to-change-home-insurance-paying-for-insurance-666x381.jpg\")
<\/a>Image Source: (Shutterstock.com\/Pixel-Shot)<\/figcaption><\/figure>\n Consider how you\u2019re paying for your insurance<\/h2>\n
According to a CoreLogic data survey, nearly 80% of all homeowners with a mortgage<\/a> also have an escrow account, which sets aside money for annual insurance and property tax purposes. If you\u2019re part of that majority, your insurance is paid and managed by your loan servicer. That means you\u2019re always entitled to choose \u2013 and change \u2013 your own home insurance, but you\u2019ll need to involve your lender in the process.<\/p>\n
If you have a mortgage loan and you are paying the insurance company directly, contact your lender and find out if they require proof of insurance updates. Make sure to keep your lender updated on any changes to your home insurance policy, no matter how you pay for it.<\/p>\n
And of course, if you own your home outright, you\u2019re free to change insurance policies without notifying anyone.<\/p>\n
Find your current policy<\/h2>\n
You\u2019ll want to locate your current homeowners insurance policy<\/a> before shopping around for new insurance. The information there will be important as you figure out your coverage needs. It will also contain necessary contact information that you\u2019ll need in order to complete the cancellation.<\/p>\n
If you cannot find your current policy, check the insurance company website; there should be a field where you can request a copy. If that fails, enlist the help of your loan manager for insurance company contact details.<\/p>\n
Read through the details<\/h2>\n
Once you\u2019ve gotten your hands on your current policy, look through it carefully. Some notable points to find and highlight:<\/p>\n
- \n
- Are there any penalties for cancelling before the policy expires?<\/li>\n
- What is your coverage limit?<\/li>\n
- What is your deductible?<\/li>\n
- Is there any limiting language regarding claims?<\/li>\n
- Are there any exclusions (additional structures, special circumstances, etc.)?<\/li>\n
- Do you currently have any discounts?<\/li>\n<\/ul>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/how-to-change-home-insurance-coverage-needs-666x381.jpg\")
<\/a>Image Source: (Shutterstock.com\/michelmond)<\/figcaption><\/figure>\n Think through your coverage needs<\/h2>\n
Now that you know what you have, consider what else you truly need. Richmond-Young says, \u201cMake sure you\u2019re not underinsured<\/a>, because that could be disastrous should something happen and you lose your home. But at the same time, you don\u2019t want to allow an insurance company to sell you insurance that you may not need or be able to afford.\u201d<\/p>\n
As you\u2019re thinking through coverage, ask yourself the following questions:<\/p>\n
- \n
- Have you made any renovations or upgrades<\/a> that increase your home\u2019s value?<\/li>\n
- How much has your house appreciated since you bought it?<\/li>\n
- Have you put in a pool, deck, or dock that may increase your liability?<\/li>\n
- Have you added another structure (shed, solar panels<\/a>, garage, carport, mother-in-law suite, pool cage, or anything else) that may not be currently covered?<\/li>\n
- Have you made safety updates (roof, windows, doors, security system) that could potentially yield a discount?<\/li>\n<\/ul>\n
If any of these things are true, you may want to start by asking for a policy update from your current insurance carrier. If nothing else, this will create a new baseline and help you compare \u201capples to apples.\u201d<\/p>\n
Shop for your new policy<\/h2>\n
A local insurance agent can help you identify insurance companies that offer coverage where you live. Because of the nuances of each community, you can often get the most accurate quote from someone who lives where you live. Plus, personalized service can help when navigating contract terms.<\/p>\n
Richmond-Young also recommends contacting your real estate agent<\/a>, no matter how long it\u2019s been since you moved to your home. Since they often connect homebuyers with insurance agents, your real estate agent would likely have several viable local contacts for you to explore.<\/p>\n
After gathering a handful of leads, go ahead and start calling around for quotes<\/a>. Some companies may have an online application option, if you prefer, but then you lose that personalized service.<\/p>\n
Using the current policy (along with any new updates) as a guide, ask for each agent\u2019s best rate along with any additional products<\/a> they may recommend. Make sure that the language and limits used in each quote are the same; if they\u2019re not, weigh those differences in your decision. Don\u2019t forget to inquire about available discounts, including wind mitigation, bundling, and loyalty discounts.<\/p>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/how-to-change-home-insurance-obtain-policy-666x381.jpg\")
<\/a>Image Source: (Shutterstock.com\/Gajus)<\/figcaption><\/figure>\n Obtain your new policy<\/h2>\n
Once you\u2019ve made your decision, fill out any paperwork and sign the contract for your new home insurance coverage. Your insurance agent should make this process easy for you.<\/p>\n
You won\u2019t want any gaps in coverage, so line up your new policy before you cancel your old one. A lapse in coverage may lead to forced place insurance<\/a>, an expensive home insurance chosen by your lender. Or worse yet, a lapse in coverage may leave you vulnerable for repair and replacement costs if a disaster were to strike in the interim.<\/p>\n
\u201cTry to avoid letting your insurance coverage lapse,\u201d Turner says. \u201cNot only does this leave you and your family’s home unprotected, it can also lead to much higher insurance costs when you do have coverage in place again. Most insurance carriers\u2019 guidelines only allow for up to 30 days in lapsed coverage, and quality insurance can be hard to find after that point.\u201d<\/p>\n
Cancel your old policy<\/h2>\n
With documentation of your new policy in hand, go ahead and notify your old insurance agency that you\u2019ll be cancelling your policy.<\/p>\n
Be sure to get confirmation that it actually was canceled and it won\u2019t automatically renew. Your old insurance agent or a customer service rep will be able to give you a confirmation email with dated documentation regarding the end of your coverage. If necessary, overlap the two policies by a day or two; remember, a lapse in coverage<\/a> can put you at risk.<\/p>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/07\/how-to-change-home-insurance-alert-lender-666x381.jpg\")
<\/a>Image Source: (Shutterstock.com\/Don Pablo)<\/figcaption><\/figure>\n Update your lender<\/h2>\n
- Have you made any renovations or upgrades<\/a> that increase your home\u2019s value?<\/li>\n