Switch Home Insurance Companies in 5 Steps
You can switch home insurance companies any time for any reason, even if you have an escrow account.
Key takeaways
- There are many reasons to change insurance companies. You may want to switch to get cheaper rates, better service or more protection.
- You can change your homeowners insurance at any time. You don't have to wait for your policy expiration date to make the switch. But make sure your new policy is paid for and in effect before canceling your old one, so you don't have a coverage gap.
- If your home insurance is paid through an escrow account, make sure to tell your lender as soon as you switch. That way they can pay for your new policy and won't be surprised by a cancellation letter from the old company.
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How to change homeowners insurance
Switching home insurance companies is easy. But it's important for you to follow the steps below to make sure you get the best rate and avoid a lapse in coverage.
Step 1: Review your current policy
Before you begin shopping for a new policy, you have to understand your current coverage and what it costs. You can find the most important info about your current policy on your declarations page, which is usually available through your insurance company's online portal.
Your declarations page includes your:
- Current rate
- Coverages and limits
- Policy renewal date
- Early cancellation fee, if any
Step 2: Decide how much coverage you need
Next, look over your policy to make sure you have enough coverage to protect your home and family.
If it's been a while since you reviewed your home insurance, it's possible that your coverage needs have changed.
Some common events that may require you to increase your coverage limits are:
- You recently renovated your home
- You added a pool or other structure on your property
- You bought valuable items that need extra protection, such as jewelry or artwork
- The size of your family has changed, or a relative moved in with you
- You started working from home
Step 3: Shop for quotes and compare companies
Now that you know how much insurance you need, the next step is to get home insurance quotes from several companies.
Insurance companies tend to ask a lot of specific questions about your home before providing you with rates. To get the most accurate quotes and qualify for discounts, you should have the following information handy:
Gather personal info for all adults living in your home, including:
- Birth dates
- Social Security numbers
- Prior addresses
Compile details about your home, including:
- Construction date
- Square footage
- Building materials
- The age of your roof, HVAC system, hot water heater and plumbing
- Renovation details and dates
- Security system and fire safety information
Gather other important info, including:
- Dates and details for past insurance claims
- Your credit score
- Pet info, including breed and bite history
Finding the best rate is important. But it's also important to choose a company with great customer service.
Most homeowners don't have a lot of interaction with their insurance companies unless they have to make a claim. However, that's exactly why good service is valuable. A reliable insurance company will help fix your home quickly and alleviate stress during a difficult time.
Best companies to consider when switching home insurance
Company | Annual rate | ||
|---|---|---|---|
| State Farm | $1,514 | ||
| Amica | $1,521 | ||
| Cincinnati | $1,646 | ||
| AAA | $1,735 | ||
| Erie | $1,979 | ||
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Step 4: Buy a new home insurance policy
Once you've found the best home insurance company for you, it's time to buy a policy.
First, choose a policy start date. If you're planning to switch homeowners insurance on your current policy's expiration date, make sure your new policy starts before then.
Next, you have to pay for your new policy.
What if I pay my homeowners insurance through escrow?
If your mortgage company pays your home insurance bill using an escrow account, you'll need to reach out to your lender before buying a new home insurance policy. That's because your lender pays the new home insurance company, rather than you doing it directly.
Can I pay my homeowners insurance myself?
You can typically pay your homeowners insurance yourself. However, if you're buying a new home, your mortgage company may charge a higher interest rate or a flat fee if you choose not to have an escrow account. That's because they'll have to monitor your insurance and taxes to make sure you're paying them, instead of taking care of it themselves.
If you choose to pay your home insurance bill yourself, most major insurance companies take payments via credit card, bank transfer or check.
How often do you pay homeowners insurance?
Most homeowners insurance companies offer multiple payment plans, including annual, semi-annual, quarterly and monthly.
Keep in mind that you may get a discount by paying your annual bill in full or signing up for automatic payments.
Step 5: Cancel your old policy and inform your lender
Once your new policy is paid for and in effect, you can safely cancel your old policy. If you're ending it in the middle of the year, ask about what you need to do to get a refund check.
Finally, if you have a mortgage, let your lender know you've switched home insurance companies.
Your mortgage lender usually requires you to have insurance. If you skip this step, the company may think you let your insurance lapse.
If your lender pays for your insurance out of an escrow account, it's very important that you reach out quickly. Otherwise, your old policy may automatically renew 30 to 60 days before the actual date.
How to change home insurance with escrow
The process of changing homeowners insurance companies is fairly similar, whether you have an escrow account or pay for homeowners insurance directly. However, you'll have to take a few extra steps once you're ready to buy a new policy.
First, you need to call your mortgage lender to let them know you plan to switch insurance companies.
This way, they know to expect a bill from your new insurance company. Giving them a heads-up will also alleviate any worry when they get a notice from your old company that you canceled your policy.
Next, confirm the address you should use on your insurance application.
Since your lender typically requires you to have an insurance policy as part of your mortgage contract, you must add them to your policy with a mortgagee clause. With this clause, the insurance company will notify your lender if you cancel your policy or it lapses because you missed a payment.
You should also ask what to do with the homeowners insurance refund check you may get from your old company. Some lenders ask you to sign the check over to them directly, while others prefer you to deposit it into your own account and make a separate escrow payment.
Once you get your refund check, send the payment to your mortgage company immediately. You don't want your escrow account to be low on funds after paying for the new policy, or your lender may increase the escrow portion of your mortgage payment to make up the difference.
Should I switch home insurance companies?
You should consider switching home insurance companies if your insurance rates go up, you find a better price for coverage or your current company no longer meets your needs.
In addition, it's worth looking into changing homeowners insurance if you:
- Moved
- Expanded or improved your house
- Bought a car
- Got married or divorced
- Had a baby
- Had a relative move in with you
- Had a change in your credit score
- Got a pet
- Added a security system or safety feature
These changes might affect your coverage needs or the cost of your insurance. For example, a renovation project will likely increase the rebuild cost of your property. So you should increase the amount of dwelling coverage you have on your home to match.
Frequently asked questions about changing homeowners insurance
Can you change home insurance at any time?
Yes, you can switch homeowners insurance companies anytime. You don't have to wait for your current policy to expire.
However, some companies charge a flat fee or portion of your annual bill if you cancel before your policy expires. If your current company charges a cancellation fee, you should consider whether you'll save more money by waiting until your policy renews or switching immediately.
What are the risks of changing home insurance companies?
There aren't many risks associated with changing home insurance companies. The most important thing you must do is make sure your new policy is in effect before canceling your old insurance. That will prevent you from having a lapse in coverage.
Changing insurance companies too often may cause you to lose out on loyalty discounts. If you're switching due to price, ask your current company whether you're eligible for a loyalty discount before making any changes.
Is homeowners insurance paid through escrow?
You can find out whether your home insurance bill is paid through an escrow account by calling your mortgage company or checking your mortgage statement. Your mortgage statement should have a payment breakdown that shows the portion of your monthly bill that goes toward principal, interest and escrow.
If your home insurance is paid through an escrow account, you'll need to take a few extra steps when changing insurance companies, including letting your lender know you plan to switch.
Is homeowners insurance paid in advance?
Yes, homeowners insurance is typically paid in advance. This is especially true if you have an escrow account, in which case your bill is usually paid annually. If you cancel your home insurance policy in the middle of the term, your old company should send you a prorated check for the unused balance.
Can I switch homeowners insurance with an open claim?
You can switch home insurance companies with an open claim. However, you'll still have to work with the old company to finalize the claim payout and get your home fixed. If you're switching in hopes of avoiding a price increase after a claim, it won't work. Your current company will file a report that the new company will see, so your rates will likely still go up.
Can you transfer homeowners insurance to the new owner?
No, homeowners insurance can't be transferred from one person to another. The new owner of your home will need to buy a new insurance policy to get coverage.
Does home insurance start immediately?
Most of the time you can buy a home insurance policy with coverage starting the following day. However, that may not be the case if there's a major storm headed your way or your area just experienced a natural disaster. In that case, many companies will hold off on selling new policies for a period of a few weeks to a month. This is called a waiting period.
How do I cancel my home insurance?
Most insurance companies allow you to cancel your policy over the phone. Some companies may require you to send a cancellation request in writing. It's important to ask for a confirmation email or letter from your insurance company, in case your mortgage company asks for documentation.
Methodology
To determine average home insurance rates, ValuePenguin collected home insurance quotes for every residential ZIP code in the United States from the largest homeowners insurance companies in every state. Rates are for a $350,000 home owned by a 45-year-old married man with good credit and no prior insurance claims.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurance company filings and should be used for comparative purposes only. Your own quotes may be different.
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
How to switch home insurance
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