How to Switch Homeowners Insurance Companies in 6 Easy Steps

Switching homeowners insurance is a straightforward process. 

The industry saw double-digit rate increases in 25 states in 2023, leading many homeowners to seek better rates at different companies[1].

Reasons to Consider Switching Home Insurance Companies

Switching insurance providers is often driven by the desire to optimize coverage and costs, especially as premiums may differ significantly between carriers. Homeowners often seek out more cost-effective policies as a means of cutting annual expenses. 

Switching may also be motivated by the desire for improved coverage or customer service. Policyholders may find their current provider no longer meets their changing needs or that customer support or claims processing are unsatisfactory. When this is the case, homeowners might begin to look around for alternative options.

A few other reasons you might consider switching your home insurance provider include the following:

• Insurance bundling opportunities
• 24-hour live representatives
• Relocation
• Discounts or rewards
• Changing financial situation
• Policy review

6 Steps to Switch Homeowners Insurance Companies

1. Review Your Current Policy	Begin by reviewing your current policy to understand your existing coverage.
2. Evaluate Your Coverage Needs	Assess whether your current coverage fully meets your needs.
3. Compare Insurance Companies	Research different insurance companies, get quotes, evaluate coverage limits, and look for any available discounts.
4. Verify Your Current Insurance End Date	Ensure that there’s no gap in coverage by confirming the effective dates of your existing policy.
5. Purchase the New Policy & Cancel the Existing Policy	Provide the necessary documents to your new insurer, purchase the new plan, and then cancel your current policy.
6. Notify the Lender of a Change in Policy	Inform your bank or lender about the insurance update, as it may affect your mortgage.

1. Review Your Current Homeowners Insurance Policy

This is an important step to clarify coverage, restrictions, and any updates. Make sure you are clear on details of what to expect if you have to file a claim due to a natural disaster, theft, or liability issue.

By reacquainting yourself with the details of your policy, you can make sure it still provides adequate coverage for your changing needs. Regular assessments safeguard your financial well-being and ensure your coverage is as comprehensive as it needs to be.

Here are some of the things to consider when reviewing your homeowners insurance plan:

• Coverage limits
• Deductible
• Premium
• Payment schedule
• Potential gaps in coverage
• Loss of use coverage, which refers to living expenses that may be incurred if you must vacate your home due to damage caused by a covered event
• Home improvements, including those made since your current policy was purchased
• Sublimits, which refers to limits that may be placed on specific types of high-value items, such as computer equipment or fine art
• Claims process
• Customer reviews of the insurer
• Discounts for home safety

2. Consider Your Coverage Needs

Homeowners should be considering how their coverage needs have changed, such as home improvements that have been made, items that have been purchased, and any increased risks (for example, a new pet or a swimming pool).

Here’s a quick look at some common coverage types to help you decide.

Dwelling Coverage

Dwelling coverage is at the core of homeowners insurance, protecting both the structure and foundation of your home. In some cases, it may also include attached structures, such as carports or lanais, as well as HVAC and plumbing systems. Sufficient dwelling coverage ensures you can repair or rebuild after damage or loss due to a covered hazard while taking into account factors like construction costs and local building codes.

Personal Property Coverage

Personal property coverage provides protection for your possessions, such as furniture, electronics, clothing, and appliances, in the event they are damaged, stolen, or destroyed. Consider the total value of your possessions when selecting an adequate coverage limit. Lisa Koosis, a former claims specialist, says, “In some cases, you may need to purchase additional insurance for high-value belongings, such as fine art or heirloom jewelry, so make sure to talk to your agent or a company representative about your household inventory.”

Liability Coverage

Liability insurance protects you in case someone is injured on your property and sues you for medical expenses and legal fees. It also provides coverage for damage you cause to someone else’s vehicle or property.

3. Compare Home Insurance Companies

To find an insurance provider, start by searching online marketplaces for easy comparisons. Visit websites like Geico, Progressive, or Allstate to gather info and get quotes. You can also consult an independent insurance agent who can offer you personalized advice and access to multiple insurers. 

Get recommendations from friends and family, check group coverage through professional associations, consult local agents, and read online reviews and ratings to find the right homeowners insurance policy that fits your needs.

When comparing insurance policies from different companies, consider the same factors you assessed in reviewing your current policy, such as extent of coverage, deductibles, premiums, customer service, policy terms, and exclusions.

Lisa Koosis, a former claims specialist, says, “If you’re planning on switching insurance companies, make sure the provider you choose is financially stable and can pay out a claim when you need them to. Agencies such as A.M. Best and Standard & Poors provide easy-to-understand ratings that can help you find a financially secure company to do business with.”

4. Double-Check Your Current Policy’s Coverage Dates

Maintaining continuous coverage ensures uninterrupted access to financial support in the event of an emergency, shielding you from unexpected repair costs and living expenses that could add up fast without insurance coverage. 

To make sure you do not have a lapse in coverage as you transition from one policy to the next, double-check that your new policy will begin on or before the date your old policy will expire. 

5. Apply for the New Homeowners Insurance Policy & Cancel the Old One

Follow these steps to apply for a new home insurance policy.

Start the Application Process

You can usually do this online, over the phone, or in person. You’ll provide information about your home, including its size, location, construction materials, and security features. You may also need to provide details about your insurance history. Some insurance companies may require a formal third-party inspection report as part of the application process.

Get a Quote

The insurance carrier will review your information and give you a personalized quote.

Review the Policy

Carefully review the terms, coverage limits, deductible, exclusions, and any endorsements in your new policy to make sure it fulfills your needs. Mortgage lenders may have specific requirements that a policy needs to meet or else you can default on your loan, so those should be reviewed as well.

Remember the Waiting Period

Once you accept a new policy, there may be an inactive period before it goes into effect. During this period, your previous policy should remain active.

Provide Proof of Coverage

Once your new policy is in force, secure proof of coverage immediately for various uses, such as mortgage requirements, claims filing, or emergency situations[2]. Keep this proof readily accessible.

Do not cancel your old policy until you are certain that the new one is active to avoid a lapse in coverage[3]. A lapse could leave you without insurance protection, which can be risky and cause problems with your mortgage lender. Once the new policy is confirmed and in effect, contact your old insurance provider to cancel the old policy.

6. Notify Your Lender About the Change in Homeowners Insurance

When you get a mortgage, your lender wants to protect their investment in your home[4]. They require you to have homeowners insurance throughout the loan’s life. This is crucial because it safeguards both you and the lender from any damage or loss to the property or your belongings.

If you make changes to your insurance, like getting a new policy or canceling the old one, tell your lender right away. They rely on continuous insurance to avoid financial risks. Not informing them about changes can lead to more expensive lender-imposed policies that may not provide the coverage you need. 

To notify your lender, follow these steps:

• Contact your lender before making insurance changes to maintain transparency and compliance with your mortgage agreement.
• Be ready to share specifics like effective dates, the insurance company name, and any coverage adjustments.
• Ensure your changes meet your lender’s minimum coverage limits or endorsements, or discuss alternatives that meet their criteria and your needs.
• Ask for acknowledgment of your changes via email or letter, so you have a record of communication.
• Keep your existing insurance active during the transition to avoid gaps or lender-imposed coverage. This helps you and your lender stay protected.

Frequently Asked Questions About Switching Homeowners Insurance Companies

Switching homeowners insurance providers is no small decision. To guide this process, we have compiled a list of frequently asked questions with answers on how to switch homeowners insurance companies easily.