Knowing how to switch your insurance policy between providers is essential. Remember our talk about the perils of being underinsured? The last thing you want is to be stuck paying for a policy that offers insufficient protection.
Sometimes, it could be a simple fix by calling your current insurance agent and tweaking your benefits. But, if the adjustments skyrocket your premiums or the customer care sucks, it’s time to move.
I | Can I Switch My Insurance Provider at Any Time?
Yes, though some would say the easiest time is when your current policy term is wrapping up.
All the same, if you’re dissatisfied with your premium or the customer care service is unprofessional, no matter the reason, you can change your insurance carrier.
Where you are in your policy doesn’t matter, either. Whether your renewal date is next month, you’re only a few months into a policy or at the mid-term point. Are your insurance payments sent from an escrow account? It doesn’t matter.
Seeking out the best policy for your needs and budget is your right. You deserve the best protection and stellar customer care service, all at an affordable price. Don’t stay stuck in a lousy insurer/client relationship any longer. Explore your options.
II | Weighing the Pros and Cons of Making the Switch
As with any life or financial decision, there are pros and cons. Weigh both of them. Unless the cons are piled so high, you can’t see the pros on the other side.
Here are some pros of switching insurance providers.
- More robust and flexible coverage for your home and personal belongings;
- Multi-product discounts on bundled packages;
- Improved customer care;
- Regular discounts on everyday products;
- Savings on monthly/yearly premiums with better insurance rates.
Let’s shift over to the cons side of the conversation.
- Companies give incentives to longtime clients like loyalty discounts. Losing discounts based on your time with a company is a pinch, but don’t sacrifice your peace of mind. Lower rates await you elsewhere.
- Some companies may have early cancellation fees.
- If you have an ongoing claim, you’ll have to juggle two insurance companies at once until you’ve received compensation.
- If you’re leaving because the customer care service is a wreck, this problem may hinder a smooth transition to another company.
III | Switching Your Homeowners Policy Provider
1. Always check the terms and conditions of your current policy.
Although it’s your choice if you want to switch insurers, your current insurer would have set the rules for the breakup. Rules you agreed to once you signed the dotted line at the start of the agreement. Never sign any legally binding contract without first reading and understanding the fine print.
Some insurers set a penalty or cancellation fee for early terminations. You may want to wait until it’s almost time for renewal. While doing so, shop for your new policy and prepare it for an uninterrupted transition.
2. Consider your insurance needs.
The hope is even if your escrow account handles your premiums, you still know the annual premium and deductible. Refresh your memory on the limits and deductibles, plus check the provisions that made your current policy favorable in the first place. Your policy declarations page shows all of this information.
What features do you need to carry over into a new policy? And what would you like to drop or add when you change your home insurance carrier?
Speak with an insurance agent if you don’t understand the details of your policy. You don’t want to switch and end up saving money at the cost of being underinsured.
3. Shop for better rates.
Collect insurance quotes for matching coverages, limits, and deductibles as you compare homeowners insurance rates from different insurers.
Use the list you curated from the above step with your present coverage information as a benchmark.
But even as you search for the best rates, remember that quality matters. The reputation of the insurance company you choose factors into your protection. So does their customer service.
4. Notify your mortgage lender of the changes.
Inform your mortgage servicer if you decide to send a cancellation request for your current home policy. It’s not a must, but your lender can assist, especially if an escrow account pays your premiums. Knowing if there are any conditions on their end can only benefit in streamlining the process.
If you opt not to give prior notice, you’ll have to send your mortgage provider a copy of the new declarations page and a written notice of the switch. A part of meeting your mortgage requirements is proving your policy covers the replacement cost for your home.
5. Start your new policy before canceling your old one.
Before canceling your old policy, ensure your new policy is in effect. Overlapping your coverages by a day or two, or starting the new and ending the old on the same day, prevents a lapse in coverage.
Dealing with two providers might be tedious. But as long as you follow their instructions and that of your mortgage company, you’ll be in good stead.
One of the sticky points you’ll face is managing payments while changing your home insurance. Your new insurer might require payment immediately before starting coverage. Note the effective date once you make the payment and inform your current provider when to cancel your old policy.
Ensure your current company sends a confirmation that your policy is canceled and won’t be auto-renewed.
Conclusion
Appraise your current homeowners insurance and your insurance company annually. Are they fulfilling all of your insurance coverage needs? Do you require additional insurance to up your limits? Could you find a better insurance policy with a different company?
Switching your insurance company doesn’t have to be a stressful time once you learn the steps.
- Read the terms and conditions of your policy documents and note all the information on your declarations page.
- Consider your insurance needs and how they’ve changed since you signed your policy. Make sure you have adequate protection to prevent underinsurance.
- Shop for better rates and insurance products while keeping in mind the reputation and customer service practices of whichever insurer you choose.
- Notify your mortgage company before you switch insurers or send them a copy of your declaration papers and a written notice afterward.
- Start your new policy before ending your old one to prevent any lapse in your coverage.
If you feel lost, your insurance representative will guide you through the process.
