What You Need to Know About Changing Homeowners Insurance Companies

Changing your homeowners insurance companies makes sense in various scenarios. Maybe you’re looking to get better premium rates or a discount, or even to improve your coverage after upgrading your property. You can also be in the market for a new homeowners insurance policy when buying a home.

Here’s what you need to know about changing your home insurance company.

When Can You Switch Homeowners Insurance Companies?

There’s no statutory restriction governing when you may drop one home insurer for another. You can typically make the switch as follows:

● After canceling your existing coverage before its expiration date; however, your current insurer may penalize you for it.
● After the expiration of your existing homeowners insurance policy
● After taking out a mortgage on a new home

5 Steps to Changing Homeowners Insurance

No matter the reason for the change, there are few important steps to take when looking to change your homeowners insurance company. Here are 5 steps to consider when embarking on this process.

1. Review Your Existing Policy’s Fine Print

What are the consequences of terminating your policy before its expiration? Your homeowners insurance declarations document has key details you need to confirm, including the effective dates for your policy.

2. Consider Your Coverage Needs

Assess your current coverage needs, which may have changed since the last time you renewed or reviewed your policy. Home safety/security improvements, for example, may qualify you for lower homeowners insurance premiums or discounts.

3. Request Multiple Homeowners Insurance Quotes

Compare insurance rates from various carriers. Be sure to look at the cost for matching coverage options, limits, and deductibles. Compare new quotes with your policy declaration page and check out your existing coverages, limits, and deductibles.

4. Do Not Terminate Your Old Policy Until the New One Is Effective

The National Association of Insurance Commissioners (NAIC) advises against canceling your existing policy before you have a new homeowners insurance plan in place. The wrong timing may leave you uncovered, albeit momentarily.
Ensure the following when you’re canceling your existing policy:

● Confirm that the termination date is on or after your new coverage’s effective date.
● Ask your previous insurer to confirm your policy’s cancellation and non-renewal.
● Ask the previous insurer if you’re eligible for a premium refund.

5. Inform Your Mortgage Provider

When your mortgage down payment is less than 20% of your new home’s purchase price, your lender may create an escrow account and use it to make payments associated with the property, including payments for your homeowners insurance. From your monthly mortgage payments, the lender will be deducting and remitting your insurance premiums via escrow.

You need to let your lender know when you’ve switched to a new insurer. The notice will enable them to start sending your insurance premium payments to the correct carrier.

Be sure to send these documents to your mortgage provider:

● A copy of your home insurance declarations page
● Your previous policy’s cancellation notice

These are the 5 main steps to changing homeowners insurance, whether you’re looking to improve coverage or save money. If you need assistance in making a seamless switch to a new insurer without jeopardizing your coverage, contact our experienced professionals at J. Archer Insurance Group right away. We’re ready to help you find a competitively priced home insurance plan.

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