Essential Steps to Take While Changing Your Homeowners Insurance

Sometimes homeowners need to switch their home insurance policy or provider, such as when they are moving, trying to save money, or get better coverage. Each homeowner has their own reasons for getting certain types of insurance, depending on how many occupants live in their home and several other factors.

When Can You Switch Your Home Insurance?

You can switch homeowners insurance policies whenever you want. It’s best to shop for a policy before you purchase a new home, which is what most mortgage brokers expect. If you already have a policy in effect, changing your homeowners insurance before the expiration date will be easier.

How Many Times Can You Change Your Policy?

Most homeowners insurance plans last for a year and then can be renewed. Your insurer will send you a renewal letter before the expiration date. If you cancel before the policy expires, it could trigger a penalty or fee.

How to Switch Your Home Insurance

Before rushing into signing up for a new homeowners insurance policy, you need to take the following steps:

  1. Review the Terms and Conditions of Your Existing Policy

    Carefully review the terms and conditions of your policy. If any of them seems confusing, call up your insurance agent for clarification. The clearer it becomes that you can get a better deal somewhere else, the more seriously you should consider it. Don’t stick with a company that hasn’t been transparent about their policy or has used unethical techniques to distort or obscure its meaning.

  2. Evaluate Your Coverage Requirements

    Every homeowner has unique coverage needs based on their lifestyle. If you regularly participate in dangerous activities, such as motorbike racing or skydiving, you’ll need more coverage than the average policyholder. You’ll also need more coverage if you have kids or pets, both of which can cause accidental damage to a neighbor’s property.

  3. Shop Around

    At one time, people picked insurance agents closest to their homes or firms that had the biggest ads in the phone book. Now with the internet, countless choices are just clicks away. The internet allows you to research multiple companies in a short time to compare quotes and policy features. Keep price, deductibles, types of coverage, and coverage limits in mind. While each insurance company has its own plans and prices, the most empowering insurers are those that allow you to customize your policy.

  4. Once You Have Started a New Policy, Cancel the Old One

    Before you cancel your existing policy, make sure you have the next one in place so that there’s no lapse in coverage. Ensure that the existing policy’s cancelation date occurs after your new plan’s start date. Ask your current insurer if you are entitled to a refund if you are canceling the policy before its expiration date. Once you’ve started the new plan, make sure to get confirmation that the old plan has been canceled to avoid paying for two plans.

  5. Inform Your Lender

    Your mortgage lender will need to know when you change homeowners insurance policies. Usually, homeowners insurance is required when you seek a loan from a mortgage lender. The National Association of Insurance Commissioners (NAIC) recommends that you let your mortgage lender know about policy changes, particularly if your lender manages an escrow account on your behalf.

Follow the above steps if you plan on changing your homeowners insurance. It’s a straightforward process, but changing carriers too often could lead to higher rates. So it’s best to find a company you can stick to in the long term. Contact us at John E. Peakes Insurance Agency for more information on securing customized homeowners insurance in CA.

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