It is important for homeowners to know that they are not obligated to remain with the same company they purchased their homeowner’s insurance through—even if they pay their home insurance premium through an escrow account that was established by their mortgage company. There are many reasons that may drive a policy holder to switch their homeowners insurance to a new carrier, but the most important thing to remember before your do is to shop around and ensure you are making the best switch for you.
Once you have shopped around and decided who you are going to go with as your new homeowner’s insurance carrier, you’ll need to follow these steps to fully switch.
- Purchase The New Insurance. You need to do this before canceling your old homeowner’s insurance so that you do not have a lapse in coverage. You can discuss your homeowner’s insurance needs with one of our independent insurance agents and we can help you select a policy if you are still unsure about your coverage needs or how to enroll in a new policy and switch coverages.
- Contact Your Current Homeowner’s Insurance. Break-ups are hard, but it needs to be done. You don’t want to be enrolled in two policies—not only will that cause financial issues, but it could disrupt your coverage since you cannot be dually enrolled. Most carriers will accept a call or mailed letter, and some can accept cancellation notices via email, but you’ll have to check with your specific carrier if this is an option.
- Notify Your Mortgage Servicer. If you own your home outright, then this step can be skipped over; however, if you are making any mortgage payments, you’ll need to notify your mortgage company about your switch. This step is vital if you pay your mortgage premium through an escrow account your mortgage servicer established and maintains for you. This lets them know to start sending payments to the new homeowner’s insurance. If you pay your homeowner’s insurance directly (without an escrow account), you’ll still need to notify your mortgage servicing company. This is because having mortgage insurance is required when financing a home and they will likely be notified when you cancel your old homeowner’s insurance policy. They may not be notified of your enrollment in a new policy since you pay it directly, which could result in your mortgage servicer in taking part in “forced coverage”—where they buy a policy for you and bill you for it. To avoid this mess, give them a heads up about your insurance switch.
If you like your carrier or enjoy loyalty benefits and don’t want to switch but are looking ways to cut down on your premium, you can read up on how to lower your homeowner’s insurance costs here.