How to Switch Home Insurance Companies

Contrary to popular belief, you can change your home insurance company whenever you’d like — you don’t need to wait until your policy’s renewal date. However, if you switch companies mid-policy term, your original insurer may charge you a cancellation fee. Whether you’re looking for more robust policy options, better customer service or just a cheaper rate, Bankrate’s insurance editorial team is here to walk you through what you need to know about switching homeowners insurance.  

Can you change home insurance at any time?

You can change your home insurance company at any time, but you’ll need to be intentional in how you do it. If you’re changing homeowners insurance companies before your policy’s expiration, you might be charged a cancellation fee. You’ll also want to pay special attention to when you want your new policy to take effect. Your new policy should begin on or after the day your old policy expires. A coverage lapse can leave you both financially exposed and with a higher home insurance rate.

If you’re considering making the switch because you found a cheaper home insurance policy, you may want to speak to your current provider before finalizing any changes. While you can switch homeowners insurance whenever you want, it may be more cost-effective to wait until the policy renewal date before changing companies.

What information do you need to gather before comparing homeowners insurance quotes?

When getting a quote for home insurance, it’s important to have the following information on hand:

• Your personal details: Name, birthdate, property address and the date you want the coverage to start.
• Home details: The number of full-time residents and whether it’s your main residence. If it’s a secondary or seasonal home, the number of weeks it’s occupied per year. You might also want to create a home inventory.
• Security features: Details about deadbolt locks, fire extinguishers, sprinkler systems and any fire or burglary alarm systems you have installed.
• Building details: The year your home was built, total finished square footage, number of floors, any solid fuel appliances and any separate buildings on your property. You also need to disclose unique features of the property, such as an in-ground swimming pool or tennis court.
• Insurance history: Any claims you’ve made in the last five years, your most recent property insurance provider and the dates of your last coverage period.
• Fire protection information: How close fire services are to your home, whether your home is outside city boundaries and the distance to the nearest fire service.
• Additional coverage needs: Any specific items like home computers or jewelry that may require higher coverage limits.
• Mortgage information: This includes your lender’s official name, mailing address and your mortgage loan number. 

How often should you change homeowners insurance companies?

The answer will be different for everyone, but generally, most experts suggest sitting down and taking a close look at your policy at least once a year. That way, you can see if you’re still getting the best value for your budget. It’s especially pertinent to check your policy if your rate increases when your policy renews. Your insurance company will notify you of your new rate before your policy renews, which gives you some time to shop around for a better deal.

I was with Progressive for 10 years in Nevada, which has super high insurance rates that just kept substantially climbing throughout the past few renewal periods. I decided to shop around and had a friend that was an Allstate agent. Their policy came in several hundred dollars lower, so I switched both my auto and home insurance policies from Progressive to Allstate, while also streamlining my coverages a bit better to what I actually needed. Transitioning coverage was seamless and my refunds from Progressive came fairly quickly, although home premium refunds were a little slower than auto.

— Ryan Flanigan
Bankrate Credit Cards Writer

How to change home insurance companies

While it may seem daunting, changing your home insurance company is actually pretty straightforward. To do so,  follow these seven steps:

1. Weigh the pros and cons of changing your policy 

There are a number of reasons you might want to know how to switch home insurance. Maybe you want to bundle your home and auto policies for a bigger discount, or you want to expand your coverage with another carrier’s endorsement offerings. 

Another common reason to switch may be cost-related. A quote from a different provider for the same level of coverage could be significantly lower. However, most insurance professionals recommend carefully comparing quotes before you switch carriers. Another carrier’s lower quote may be due to lower coverage limits or reduced coverage types. Before you switch homeowners insurance companies, you might want to review your situation with a licensed insurance agent to ensure you’re still getting the coverage you need.

2. Compare ratings and consider your needs

Third-party ratings may help you decide if a company will meet your needs. For example, you could look at customer satisfaction ratings from J.D. Power and the Complaint Index from the National Association of Insurance Commissioners (NAIC) to decide if a company’s level of service is equal to what you are looking for.

Financial strength ratings may be helpful metrics to consider as well. Companies like AM Best and Standard & Poor’s (S&P) assess the historical financial strength of insurance companies and assign each company a proprietary rating. These ratings might help you get a sense of a company’s historical ability to pay out claims, especially after a catastrophic loss event like a hurricane, tornado or wildfire.

It also helps to think about what you need from a new home insurance policy that you aren’t getting from your current one. Maybe you want a user-friendly mobile app, local agents or a brick-and-mortar office. There’s more that goes into your home insurance policy than just price, and considering other factors can help you make a more informed decision. 

3. Compare your current policy to the new policy

Home insurance policies are specific, detailed and nuanced. Before canceling your policy and signing up for a new one, it’s wise to read both policies side by side. In some cases, you may find that the new policy you’re considering adds coverage or endorsements you don’t currently have on top of everything your current policy covers. More commonly, though, you’ll discover tradeoffs between the two policies. 

Below are some tips on what to look for when comparing two homeowners policies:

• Check the policy limits: You may want to make sure you are aware of how the coverage limits change, especially since property insurers have their own way of calculating your dwelling coverage amount. This calculation will appear on your policy as your Coverage A amount and will impact several other coverage limits on your policy. It’s important to ensure your coverage limits reflect the home’s current replacement cost value.
• Look for exclusions: The terms and conditions may reveal exclusions or hazards not covered in the new policy. Most home insurers exclude flood and earthquake coverage in a standard homeowners insurance policy, but some insurers may have additional exclusions, such as exclusions for certain dog breeds.
• Check your endorsements: Endorsements (also called riders) are add-ons that increase or broaden your coverage. Not all companies offer the same endorsements, so you may want to be aware of how they differ between quotes so you know if you’re losing or gaining coverage.
• Compare deductibles: The deductible is the amount of money you agree to pay if you file a claim; it’s essentially the portion of a loss that you are willing to assume. You could save money on your premium if your deductible is higher, but most insurance professionals recommend choosing a deductible you can afford to pay with little notice. It’s also worth noting that hurricane-prone states have a separate deductible for windstorm damage for named storms. In addition, Tornado Alley states have a separate wind/hail deductible.
• Review your coverage type: There are several different types of home insurance policies, and each type differs in how your coverage is handled. Getting a quote for the same type of coverage may help you more accurately compare rates. For example, if you are comparing replacement cost coverage to actual cash value coverage, you may notice a price difference, but it’s really because the coverage type is different.

Remember that the best home insurance company for one person isn’t necessarily the best company for everyone. Needs vary; working with a licensed agent can help you find the right fit for your situation.

4. Look at your current policy’s effective dates

It’s important to review your current policy’s homeowners insurance declarations page to find out when your coverage ends. If you cancel your old policy before coverage begins on the new one, you could end up with a lapse in coverage. Lapses can result in higher premiums. Even worse, if you suffer a loss while your coverage has lapsed, you will have to pay 100 percent out of pocket (and if you try to file a claim retroactively, it is considered insurance fraud). In addition, a mortgage company could purchase coverage on your behalf — called force-placed insurance — and pass the premium on to you in your monthly mortgage payment.

5. Buy the new policy

Once you know the newer quote works for you, it may be time to buy the new home insurance policy. You will be asked for an effective date for your new policy. You can set up your new policy to go into effect the same day as your current policy ends. However, most insurance professionals advise against canceling your current coverage before your new policy’s effective date. For example, if your current policy ends on June 30, you could set your new policy’s effective date to June 30. This prevents you from paying for duplicate coverage and from experiencing a lapse in coverage.

6. Notify your existing home insurance company

Once you have started or scheduled your new policy, it is likely time to contact your existing home insurer or agent and cancel your current policy. You’ll need to provide the cancellation date, and you might need to sign a form to authorize the cancellation.

If you cancel your policy on its renewal date, you likely won’t have a refund since all the premium was used up. If you cancel mid-term, though, you might get money back depending on how you pay.

7. Contact your lender

If you have a mortgage, you will likely need to keep your lender in the loop. If you pay for your homeowners insurance directly, you could call your lender to notify them that you have switched insurance companies. You may need to email your mortgage company a copy of your new homeowners insurance declarations page.

Frequently asked questions

• Will I pay more if I switch home insurance companies?
  

  Typically, homeowners switch insurance companies in order to save money, but this isn’t always the case. If you’re switching companies to obtain a more robust policy or work with a company with better customer service or digital tools, you may be paying more as a result of the switch. Adding coverage types or expanding your coverage limits typically results in a higher premium, but this may not be the case if the new company has substantially lower rates or offers more applicable discounts. The best way to evaluate whether you will pay more with a new insurance company is likely to review your new quote carefully to see how the premium, coverage options, coverage limits, deductible and discounts stack up against your existing company.

• What is the homeowners insurance declarations page?
  

  The homeowners insurance declarations page is the condensed version of your policy that includes your basic policy information. This typically includes your coverage limits, deductible amount, selected endorsements, policy effective and expiration dates, policy number, your name and address, and the name and address of the insurance company. This information will also be explained in more detail if needed in the insurance policy. The declarations page also includes information on how to file a claim.

• Can I switch home insurance companies after a claim?
  

  Yes, but it’ll depend on the status of your home insurance claim. If your claim is still in an “open” status — meaning it isn’t fully resolved yet — you probably won’t be able to change companies. Once a claim is closed, you may be able to switch companies more easily, but keep in mind you won’t be able to “get rid” of your claim by going to a new company. Insurers run Comprehensive Loss Underwriting Exchange (CLUE) reports, which gives them access to up to seven years of your prior claims history. Regardless of what company you were with at the time of the damage, a claim may influence your new insurance premium or eligibility with another company.

• How do I know if switching home insurance is a good idea?
  

  There are a lot of reasons you might want to switch your home insurance. You might find a lower price, better coverage or an endorsement or discount you were looking for. You might even switch based on the service you receive from your insurer or for a feature like a mobile app. Whether or not it’s a good idea will depend entirely on your circumstances. If you aren’t sure if you should switch, it may help to talk to an independent insurance agent. These agents contract with multiple insurance companies and may help you evaluate your situation and shop for new coverage by obtaining multiple quotes.

• How do home insurance refund checks work?
  

  When changing homeowners insurance companies, you may be due a refund from your current insurer if you’ve prepaid for coverage beyond the cancellation date of your old policy. The refund check is usually the prorated amount of the premium for the remaining coverage period.

  In cases where your mortgage lender pays your home insurance premium through an escrow account, things can get a little more complex. If your lender has already sent a payment to your previous insurer before you switched, the refund check will typically be sent to your lender. The lender will then credit the refunded amount back into your escrow account, which is used to cover future insurance or property tax payments. Notifying both your new insurance company and your lender about the switch is important to avoid payment mix-ups and ensure that everything is handled smoothly.