If you’re paying a mortgage on your home, you’re likely also paying for homeowners insurance.
Typically, homeowners insurance is set up for you as part of your escrow account when you purchase your home, and they make the payments for you—more about this below.
Now, here’s the thing:
That doesn’t mean that changing homeowners insurance companies is impossible.
Should you change home insurance every year? You could, but we recommend that you go through your policy every two years and compare your current coverage to plans available from other companies.
Even if your escrow account is paying your insurance premiums, changing homeowners insurance is easy—it only requires a few more steps.
Can I Change My Home Insurance Policy In The Middle Of The Year?
Yes. You can.
There are a few things to consider, but if you find a better deal on homeowners insurance, in most cases, you should switch your policy over.
You may even get a refund.
What Are The Risks of Changing Insurance Companies?
The biggest risk of changing insurance companies is that your coverage will lapse, and you will be uninsured. You don’t want to risk that even for a moment. The consequences can be costly.
We also do not recommend dropping homeowners insurance for the same reason. The average claim for fire and lightning damage between 2013 and 2017 was $68,322.
Water damage and freezing claims were $10,234 on average, and wind and hail damage averaged $10,182.
If your homeowners insurance has lapsed, those funds will be coming directly out of your pocket.
Can Changing Homeowners Insurance After a Claim Prevent Your Premium from Rising?
No. While another insurance company may offer you a lower insurance rate than your previous company, it’s not because they don’t know about your claim.
Insurance agencies have access to national databases that contain your claim history. You shouldn’t expect to be able to hide a previous claim form your new insurer.
THE SIMPLY INSURANCE WAY
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Agents not required.
Get quotes and sign up online without talking to an agent. But, we are here if you need us.
Unbiased, expert advice.
Get unbiased insurance education from licensed experts and also avoid dodgy sales calls.
Coverage in minutes.
You can get home insurance coverage within minutes of getting your quotes and applying.
Why Do People Switch Homeowners Insurance Companies?
People switch insurance companies for many reasons. It could be as simple as not liking their current insurance company’s customer service, or they found a better deal elsewhere.
The main reasons people decide to change homeowners insurance companies, including that they:
- Find a company that offers the same or similar coverage at a lower rate
- Want a higher level of customer service than their current company provides
- May be eligible for discounts at another company that will save them money
- Need more coverage, and their current company doesn’t offer it or offers it for a higher cost than elsewhere
- Have an opportunity to bundle their homeowner’s insurance with other insurance policies they’re carrying
How Often Do People Switch Homeowners Insurance Companies?
Believe it or not around 75% of people don’t do any shopping for home insurance before they buy their home.
This means that you probably need to look at switching today and then as mentioned, review your homeowners insurance policy every two years.
Some people do this more often and others less. It truly is up to you.
However, if you are not gaining some benefit from switching your policy, it’s likely not worth the effort.
INSURANCE WHERE YOU LIVE
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How Do I Change Homeowners Insurance Companies?
Once you’ve found a company that you want to switch to, changing your coverage is relatively easy.
Just follow these below steps and you will be on your way to switching your policy.
- Review your current policy to understand the coverage amounts and what your premium is. Look for any early cancellation fees or penalties.
- Fill out the application for the new company. Ensure the offered rates are better than what you’re paying for comparable coverage, including fees and penalty costs. Verify your new insurance policy will start on the date needed.
- Contact your current insurance company and tell them the date you want your coverage to end. Most will require this in writing or via email. Make sure your old insurance policy coverage and your new coverage do not leave any coverage gaps.
- Tell your mortgage company and your escrow company about the change. This is important. If they find a lapse in coverage, they may sign you up for emergency coverage to protect their investment. Emergency coverage is costly.
That’s it; I want to reiterate how important it is to ensure your insurance doesn’t lapse.
The average property damage claims in 2020 was $12,474.
You don’t want to pay that out of pocket especially when it’s most unexpected.
What If I Purchased Coverage Through an Escrow Account?
If you pay for your homeowners insurance through your escrow account, you may wonder, “How do I change my homeowners insurance with escrow?”
Changing homeowners insurance companies is not any more difficult if you’re paying your premium through an escrow account.
It just requires a few extra steps.
If you’re not sure what an escrow account is, read on. We’ll explain it in detail below.
What is an Escrow Account?
When you get a mortgage and pay less than 20 percent of the house’s value as your down payment, your lender will set up an escrow account.
This account pays for things like property taxes, mortgage insurance, and homeowners insurance while you are still paying for your home.
How Do Escrow Accounts Work?
When you make your monthly mortgage payment, you are actually making two payments. One is to your mortgage, and the other goes into your escrow account, which handles the other payments needed.
Your monthly statement tells you how much of your money goes toward your mortgage and where the rest of the funds are going.
How Do I Change my Homeowners Insurance with an Escrow Account?
You don’t need to keep the same homeowners insurance company if you have an escrow account.
You can even change homeowners insurance after closing.
Just follow the same steps we listed earlier on this page.
Depending on how much is in your escrow, it is possible that you’ll have to make an additional payment, but if the new policy has a lower premium, a refund is more likely.
I would recommend depositing this back into your escrow account.
THE SIMPLY INSURANCE WAY
Home Insurance made easy.
Agents not required.
Get quotes and sign up online without talking to an agent. But, we are here if you need us.
Unbiased, expert advice.
Get unbiased insurance education from licensed experts and also avoid dodgy sales calls.
Coverage in minutes.
You can get home insurance coverage within minutes of getting your quotes and applying.
Taking Action
If you haven’t reviewed your homeowners insurance policy in several years, now is the time.
You may find significant savings by comparing your current policy with coverage offered by other companies.
Switching insurance companies is easy, whether you are paying through an escrow account or directly to your insurance company.
If you want to update your homeowners insurance, we’ve done the hard work for you—check out the top four companies or get your free quote for homeowners insurance today.