Insurance can be complex, and you may want to know if switching insurance providers is in your best interest. After all, you don\u2019t want to leave yourself underinsured or with a gap in your coverage.<\/p>\n
To find out, we asked top insurance experts for their input. Below, they answer some of the most critical questions asked by homeowners to discover when you can change homeowners insurance providers and if it\u2019s worthwhile to do so.<\/p>\n If you\u2019re thinking about changing insurance providers, you want to ensure you\u2019re getting a better deal while maintaining the needed coverage. Is switching providers even the right choice for you? It could be if you:<\/p>\n Stine Jackson, a South Bay Luxury Specialist with\u00a0The Oldham Group<\/a>, says it can be good to shop around insurance policies every year or two and see if switching will save you money. She recommends asking your real estate agent for recommendations.<\/p>\n \u201cMy recommendation is always to reach out to your Realtor\u00ae to see if they have a referral for an insurance broker. An insurance broker has access to insurance policies from different companies. They\u2019ll be able to see all your options with the different rates and what they cover.\u201d<\/p>\n Of course, you can also reach out to individual insurance companies to compare policies.<\/p>\n You\u2019ll want to ensure you\u2019re covered for anything that may happen and have adequate insurance to cover fires, floods, and other natural disasters if those are typical in your part of the country.<\/p>\n In some cases, you may save money by bundling your homeowner\u2019s insurance with your auto policy<\/a>, so that\u2019s worth considering too.<\/p>\n There\u2019s no shortage of ways to check out insurance providers online. You can look through the Better Business Bureau<\/a>, J.D. Power\u2019s Customer Satisfaction Survey<\/a>, and other independent ratings.<\/p>\n These rating companies look at trends and customer reviews to assess how happy people are with their insurance providers. They can be helpful, but since they\u2019re not specific to your situation, they don\u2019t give you all the information you may need to decide on your own homeowner\u2019s policy.<\/p>\n Additionally, you can check out customer reviews (but take them with a grain of salt.) Again, you\u2019re not privy to the specifics.<\/p>\n Jackson recommends going through policies line by line and asking plenty of questions to make sure you understand everything.<\/p>\n In particular, you\u2019ll want to compare:<\/p>\n Policy limits get into the nitty-gritty of insurance policies. According to the National Association of Insurance Commissioners <\/a>(NAIC), your coverage can relate to your home, other structures on your property, liability, loss of property, and loss of use if your home is being repaired and you can\u2019t live in it.<\/p>\n Nick Schrader, an insurance agent with Texas General Insurance<\/a>, says, \u201cPeople tend to overlook liability coverage, and sometimes it might not be enough. Some insurance companies restrict the amount of liability coverage; if that happens, you may want to take a chance on umbrella insurance for extra liability coverage. If you own a collection of recreational vehicles like ATVs, golf carts, snowmobiles, and the like, you might want to look for a policy that covers these valuables.\u201d<\/p>\n Ask about the appropriate amount to insure your property. It\u2019ll vary depending on your home, location, and other factors.<\/p>\n Many things could be excluded from your insurance policy. Everything from weather concerns like floods, earthquakes, and fires to squirrels nesting in your attic<\/a>.\u00a0<\/b><\/p>\n Jackson says, \u201cExclusions are really important in terms of making sure you have a full understanding of what your policy covers. One of the most relevant exclusions we\u2019re seeing today is a short-term rental<\/a>. There are a lot of companies that will not provide home insurance for a short-term rental company or people who intend to use their property as a short-term rental. So make sure you\u2019re open and honest with your insurance agent about your intended use.\u201d<\/p>\n A deductible<\/a> is the amount of money you and the insurance company have agreed you\u2019re responsible for paying. So if you have a $1000 deductible and file a $10,000 claim, your insurance company will cut your check for $9000.<\/p>\n Jackson says, \u201cThe higher your deductible, the lower your annual premium.\u201d So if you\u2019re willing to gamble in the long term and you want to keep your monthly payment down, then a higher deductible may be a good option. Or, if you don\u2019t feel comfortable that you\u2019ll have a larger chunk of change for a potential repair, then you\u2019re best to go with a slightly lower deductible.<\/p>\n In essence, replacement value is what it would cost to rebuild the home. Cash value is what you would sell your home for. Of course, it can quickly get more complicated <\/a>than that. If you opt for replacement costs and your home is damaged, the insurance would cover the replacement cost at the current price.<\/p>\n Cash value<\/a> is related to what you could sell the item for right now or the replacement cost minus depreciation. Your insurance provider can explain these to you as they relate to your specific needs.<\/p>\n As you can imagine, you\u2019ll need proof of your new insurance policy before you cancel the old one. Jackson says, \u201cThey\u2019ll want to know who\u2019s servicing your loan. You\u2019ll need your paperwork.\u201d<\/p>\n One thing to keep in mind is that you don\u2019t want a gap in your coverage. So make sure your new policy is in place before you cancel your old one, and for caution\u2019s sake, you can have them overlap a day or two. That way, you won\u2019t risk a lapse in coverage<\/a>.<\/p>\n Your insurance policy will have something called a homeowner\u2019s declaration page<\/a> with policy dates, coverage info, and the name and address of the insured location.<\/p>\n Once you have your new policy lined up and confirmed, you can cancel your old insurance. You\u2019ll receive an email confirmation with official documentation for your records.<\/p>\n You can switch your policy any time though Schrader says, \u201cStandard homeowners policies normally last for a year, and you are expected to receive a renewal notice before it expires.\u201d<\/p>\n Jackson says it makes sense to review your homeowners policy every year or two. You can put a note on your calendar to confirm your current policy\u2019s effective dates and start shopping around a few weeks earlier so you have time to make the switch. Again, you don\u2019t want your coverage to lapse.<\/p>\n If you\u2019re canceling your insurance before it ends, there could be penalties or cancellation fees. Your insurance policy should clearly identify any penalties, and you can ask your provider for clarification. Then you can assess if it\u2019s worth it to cancel or if you\u2019re better off waiting a few months when your policy expires.<\/p>\n Once you\u2019ve decided on your new policy, you can cancel your old one. As noted above, you don\u2019t want a gap in your insurance coverage, so make sure you know when your old one ends, and your new one begins. That way, you can build in a day or two of overlap.<\/p>\n Once you have your new insurance policy, you\u2019ll want to notify your existing insurance carrier to cancel your insurance. If you have an automatic withdrawal set up, you don\u2019t want to continue paying for something you\u2019re not using!<\/p>\n An independent insurance agent at World Insurance<\/a> in New Jersey, Seth Hirschhorn, says, \u201cI always advise binding your new coverage and policy first. Then, once your new policy is effective, you\u2019re able to contact your \u2018old\u2019 company or agent and request the cancellation of those policies.\u201d<\/p>\n \u201cBinding<\/a>\u201d means you have coverage, yet you don\u2019t have the policy yet. For example, if you agree to a new policy over the phone, you\u2019ve committed to it, so it\u2019s \u201cbinding.\u201d<\/p>\n You\u2019ll also want to notify your lender (if you have a mortgage) that you\u2019ve switched insurance providers. The reason is twofold. First, most lenders require you to have homeowner\u2019s insurance, <\/a>and second, if you have an escrow account, they\u2019ll need to send payments to the new insurance company.<\/p>\n An escrow account<\/a> is where your mortgage lender puts a portion of your monthly payment. It\u2019s earmarked for property taxes and insurance. You don\u2019t want them paying your old insurance provider instead of your new one!<\/p>\n![\"home](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/09\/Untitled-700-x-400-px-1-666x381.png\")
<\/a>Where do I start?<\/h2>\n
\n
![\"cozy](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/10\/2-1-666x381.png\")
<\/a>How can I research insurance providers?<\/h2>\n
How do I compare policies?<\/h2>\n
Policy limits<\/h3>\n
Exclusions<\/h3>\n
Deductibles<\/h3>\n
Cash value and replacement value<\/h3>\n
![\"typing](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/10\/1-1-666x381.png\")
<\/a>What do I need when changing homeowners insurance?<\/h2>\n
When should I switch?<\/h2>\n
Be aware of penalties or cancellation fees<\/h3>\n
Be sure to buy your new policy before canceling the old policy<\/h3>\n
Who do I need to contact?<\/h2>\n
![\"a](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2021\/09\/Untitled-700-x-400-px-666x381.png\")
<\/a>What if I already paid my policy for the year?<\/h2>\n