Don’t assume that you should stay with your current home insurance provider if you’re planning to buy a home soon or you already own one because staying with the same home insurance company for several years can pay big dividends. Yes, you might receive discounts if you’re doing business with them for a long time; however, switching insurance companies can offer you lower rate options when your policy is at some point mid-year or up for renewal.
Why switch?
To get the best coverage, price, and service, shopping around is a good idea. Here are some of the reasons why you should switch home insurance companies:
- Service – If you’re not fully satisfied with your current home insurance provider’s service, especially when filing a claim or getting updates about your policy, you should consider switching.
- Price – Even if your current insurer offers many discounts, you will surely find other insurers with better home insurance prices. Consider if the discounts you’re getting with your current provider really helps you save up.
- Discounts – Check if the price break for your provider’s auto and home insurance bundle is enough for you. If not, then you should consider switching.
- Coverage – If you need additional coverage for your home and not everything is available at your current insurance provider, shop around and look for a company that offers what you need.
Steps on how to switch when you already have a home
Follow these steps if you’ve decided to change your home insurance provider.
1. Shop around and look for a new insurance company
Compare home insurance quotes of about four insurance companies and look for one that can offer everything you need. To do that, you can use the average home insurance rate tool that is available online for free. It will show the lowest and highest insurance premium rates from different carriers.
Always remember that your home is one of the most valuable assets you can have. Make sure to keep it and all of your belongings protected from different damages and losses caused by disasters and accidents.
2. Apply for it
Once you’ve finished choosing another home insurance carrier, you can now talk to one of their agents over the phone or fill up an application form online. Some basic information would be asked to you, such as the age of your home, its size, and the location. Don’t forget to list the items that have value, such as business equipment, arts, and jewelry so you can insure them as well. Make sure that the insurance company you’re applying to offers all the deductibles you can manage and the features you need.
3. Make it effective
After your application, you will know the date when your new home insurance policy will take effect. Before it takes effect, make sure that your existing policy is already canceled. Call the insurance company and tell them that you want to cancel your premium and say the date when you want it to be canceled. You can also write a written request and email it to your home insurance company. Include your name, policy number, your address, and your contact information in the request you will be writing.
Steps on how to switch when you have an escrow account
Here are the steps on how to switch when your premiums are paid through an escrow account.
1. Check the existing policy
Know your annual premium, deductible, and coverage and compare it to similar policies of other insurance companies. You can look for this information by opening your home insurance account online or your policy documents. Also, look if there are any fees if you want to cancel in the middle of your policy. Contact the insurance company if you can’t find the information.
2. Shop around
Compare rates from different insurance companies by using the average home insurance rate tool on the websites of your prospective providers. Make sure that when you get quotes, the policies underwritten in it are all the same.
3. Notify your lender
It’s not necessary, but you should notify your lender about switching your home insurance carrier. It will help you avoid inadequate coverage and you will know what to expect from the process as well. Lenders want to make sure that the new policy will pay for the damages of your home if something unexpected happens. Send a copy of your new written notice that you canceled your old policy as soon as possible if you change your home insurance provider without notifying your lender.
4. Purchase the new policy before canceling the other.
Make sure that your new insurance policy will take effect before the old one expires. Unused premiums can be refunded when you cancel in the middle of your policy; however, don’t spend it immediately because you might need to return it to your escrow account for the new policy’s payments.
5. Leave it to your lender
Notify your mortgage servicer as soon as the switch is scheduled so your records will be updated and future payments will go to the right home insurance company. You may owe some money on the escrow if your new policy is more expensive than the old one. Remember that any funds in your escrow account will either be refunded or be used for future premium payments.
Final Thoughts
Whether you want to switch your home insurance company or not, make sure to evaluate it every year. The best time to shop and switch is when you’re current home insurance policy is about to expire. If you find a company that is better and reliable, go for it. Don’t settle for less.
