A Guide for How to Switch Home Insurance Companies
Most homeowners think they need to wait for their home insurance policies to expire before considering transferring to a different provider. In reality, you can change companies at any time. MoneyGeek can walk you through the relatively simple process.
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There are several reasons why homeowners may want to transfer to a different home insurance provider. Whether it's to take advantage of bundling discounts, get lower rates or change coverage amounts, know that the option to switch companies is available. Even if you’re just dissatisfied with your current carrier, you don’t have to wait for your policy to expire before finding a new one.
Changing home insurance allows you to have better control over your coverage and maximize the benefits offered by another provider. To make the process easier, MoneyGeek outlined how to switch home insurance companies so you can avoid some common pitfalls and find a provider that meets your needs.
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You can choose to change home insurance companies at any time instead of waiting for your current policy to expire. Whether you’re doing it because you want lower rates, your coverage needs have changed, or you’re unhappy with your present provider, changing homeowners insurance is within your rights as a homeowner.
If you decide to switch home insurance providers, timing it right is crucial. Otherwise, you may lose out on better deals or discount programs, have a gap in coverage or pay for two policies simultaneously.
If you have a mortgage, you must inform your lender once you’ve paid for your new policy and canceled your original one. All mortgages require your insurance policy to be up-to-date. If your lender is unaware of your decision to switch home insurance providers, they may find you at default and foreclose your home.
How to Switch Home Insurance Companies
If you’re wondering if you can change home insurance at any time, the answer is yes. However, be sure to follow some key steps to ensure you purchase adequate coverage, avoid lapses in coverage and sidestep paying for two policies at once.
MoneyGeek breaks down how to switch home insurance companies — even in the middle of your policy term.
1. Review your existing policy.
Knowing the details of your policy — your limits, deductibles, inclusions, exclusions and expiration date — can help you make an informed decision when changing your provider. If you have an ongoing mortgage loan, your lender may have requirements for insurance coverage that your new policy must meet. You also need to know if your home requires special coverage, like insurance for earthquakes or floods.
It may take a bit of time and effort to comb through your policy, but skipping this step could result in you purchasing an insurance plan with unnecessary or missing coverage.
2. Decide if switching home insurance is the right move for you.
Although changing homeowners insurance isn’t complicated, it can cost you more money in the long run if you’re not careful.
It may be tempting to switch to a company that offers lower rates, but it’s important to confirm that they provide the necessary coverage for your home. Understanding your home’s replacement value and your personal property’s worth gives you a better idea of how much home insurance you need. You can use this information to ensure you’re getting the best possible deal for the coverage your required coverage when shopping for homeowners insurance.
View the table below to see MoneyGeek’s takes on the best home insurance companies for different buyer categories.
The Best Home Insurance Companies for 2021
- Insurance CompanyMoneyGeek’s Take
- AllstateBest overall
- USAABest for military families
- LemonadeBest online tools
- ErieBest for range of options
- FarmersBest service
- ChubbBest for pricey homes
- AllstateBest for affordable coverage
- State FarmBest for bundling
Keep in mind that rates vary depending on where you live, so be sure to look for the best home insurance companies for each state.
3. Time your switch well.
Although you can change homeowners insurance at any time, it's best to time the switch to your advantage. If you don't, you could have a gap in coverage if your current policy expires before you choose a new policy or pay for two plans simultaneously.
Some companies offer a refund for the unused portion of your annual premium if you cancel your policy early. Others may subject you to fees or penalties. It’s best to check your current provider’s policy before you end your coverage.
If you’ve already decided on a new carrier, take some time to evaluate if your new policy is worth the penalty you’ll pay for canceling.
4. Gather the information you need to get quotes.
You’ll need to get quotes from various home insurance providers to find the best new carrier for you. Before you can secure those, however, make sure you gather the necessary information. Companies typically need information about you, your home and your household to give you an accurate quote.
- Social Security number
- Construction date
- Used materials
- Square footage
- Renovations or repairs made on your home
- Security devices installed
Other relevant information:
- How many people live in your home
- Your claims history
- Your credit standing
- Dogs or other pets
Not all insurance companies will require all this information, but it’s better to have it ready if you need it.
5. Shop around for quotes from multiple insurers.
Once you have your information ready, it’s time to compare quotes for homeowners insurance. No matter how attractive the rates may be, don’t settle for the first carrier you find: Getting home insurance quotes from three or four companies is ideal.
To save time, you can shop online and use an online comparison tool. Comparison tools allow you to look at sample rates from multiple insurers simultaneously.
Comparing prices from different companies could save you hundreds of dollars every year. MoneyGeek's analysis showed that the most expensive insurer could charge an identical homeowner almost $300 more per year compared to the cheapest. These rates are based on dwelling coverage of $250,000 and personal property coverage of $100,000.
The Average Cost of Home Insurance by Company
- CompanyAnnual Premium
- State Farm$2,027
6. Narrow down your insurer and policy options.
Having too many homeowners insurance options can be overwhelming. When narrowing down your choices, it can be beneficial to consider aspects of coverage outside of rates. Depending on what you’re looking for, a policy’s billing plan, deductible and date of effectiveness may be factors to consider. Looking at homeowners insurance reviews can also be a great way to gain insight into what each company offers.
Although home insurance providers with low rates are attractive, other aspects become crucial once your policy takes effect. Filing a claim can be stressful, so it’s best to choose a carrier that provides good customer service and is financially stable enough to pay out valid claims.
7. Secure the policy you need.
Before finalizing your new policy, keep the following in mind:
- Decide on included coverages. Aside from dwelling and personal property coverage, do you need additional coverages? These can be add-on coverages for specific perils, such as floods or earthquakes.
- Check on bundling possibilities. See if there are options to combine your home insurance policy with your auto insurance coverage. Bundling policies could save you hundreds of dollars every year.
- Pay for your new policy. Be sure to pay for your new policy before canceling your old one — this helps prevent a coverage gap since it can take several days for your new policy to go into effect.
8. Cancel your old policy.
Make sure you communicate your intent to terminate your policy with your present provider. If your policy auto-renews, you could pay for two plans simultaneously. You’ll also need to inform your provider when your cancellation takes effect. If they require you to do so in writing, ask for the physical address or email address you’ll need to send the document to, as well as the information you’ll need to include.
9. Notify your lender of the change.
Typically, your mortgage requires your home insurance policy to be up-to-date. Call your lender and notify them that you’ve completed the process of changing home insurance companies. Be sure to send them documentation that includes:
- Your mortgage loan number
- The names and addresses of your present and new insurance company
- Your old and new policy numbers
- A payment receipt from your new insurance company
- A copy of your previous policy’s cancellation notice
Your lender can default your mortgage if you fail to maintain insurance coverage, which could result in the foreclosure of your home. Informing them that you’ve switched insurance companies ensures your records are updated and your loan is secure.
Can You Switch Homeowners Insurance Companies at Any Time?
Technically, you can choose to switch homeowners insurance companies at any time. However, you may have to pay fines or penalties for not finishing the term. It’s also vital that you consider the timing of when you want to switch companies.
If your timing is off, you may experience a coverage gap. If you have a mortgage, this could have serious consequences — namely, your home’s foreclosure.
What Are the Most Common Reasons for Changing Coverage?
Changing home insurance companies is within your rights as a homeowner. Switching providers can give you more control over your insurance, and you can do it any time.
Some of the most common reasons homeowners consider changing home insurance are getting a better price, meeting a change in coverage needs, taking advantage of discounts, or finding an insurer they're happier with.
To get a better price.
Homeowners often decide to change homeowners insurance companies because they want to get lower rates. Providers set premiums based on several factors that may change over time.
Certain events, such as filing a claim, can cause your current provider to increase rates. Some carriers also offer special discounts to homeowners who switch, serving as an incentive to change home insurance companies.
To meet a change in coverage needs.
It’s best to reassess your coverage needs when your life circumstances change. If you are getting married, you may want to increase your limits to cover new valuables received. Having your home renovated may also cause your premium to change.
Remember that different insurance companies offer varying types of coverage. One example of this is protection against specific perils such as earthquakes or floods.
When your needs change, you may find another provider that offers a better deal.
To bundle coverage or take advantage of other discounts.
Some people consider changing home insurance to purchase a new policy from the same company that provides coverage for their car to save money. Home and auto insurance bundles can score the average consumer 17% lower rates for their policies.
Additional discounts can also be a compelling reason to switch policy providers. Insurance companies all offer different discounts based on your driver profile and location — knowing which are available to you from several providers can help you find more cost-effective coverage.
To find a better insurer.
If you’ve filed a claim with your current homeowners insurance company and had a negative experience, you might want to look for a different provider.
Filing a claim is typically stressful, given you tend only to do so after your home or belongings incur significant damage. A good insurance company doesn’t just offer low rates; it also helps you avoid additional stress by processing claims efficiently. Homeowners may switch to a company with better customer satisfaction results and financial stability to make the claims process more manageable.
Frequently Asked Questions About Changing Providers
Homeowners considering changing home insurance companies often have many questions about the process — MoneyGeek answered some of these to help make switching providers easier.
About the Author
- Insurance Information Institute. "10 Questions to Help Assess Your Changing Insurance Needs." Accessed September 5, 2021.