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Staying with the same homeowners insurance company has benefits, like loyalty discounts of up to 10%. But there are a lot of good reasons to shop around, like customer service issues or a rate increase.

Whatever your reason for wanting to switch insurance companies, the process is easy. You can switch home insurance companies at any time, not just at renewal, and all you have to do is choose a new policy, make sure it’s in place, and then cancel the old one.

Read on for the details on switching your home insurance.

  • You can switch your home insurance policy to another company at any time during the policy term.
  • Make sure there is no lapse in coverage when you switch to avoid denied claims and problems with your mortgage company.
  • Compare not only rates but also the reputation of several different home insurance companies before you decide to make a switch.

How to switch home insurance companies

Changing your home insurance is easy, and you can do it in just four steps.

Step 1. Shop for a new policy

Compare home insurance quotes and find a carrier that can offer you a better deal while meeting all your insurance needs. You can easily compare average home insurance rates and get quotes just for your needs online. Make sure you know how much coverage you need based on your current policy and the updated replacement cost of your home. Compare quotes that are all for the same amount of coverage, and don’t forget to check each company’s reputation.

Step 2. Apply for new insurance

Once you have chosen your new company, you can complete the application process either online, over the phone, or with an insurance agent. You will need to provide some basic information, such as the location and size of your home and the year it was built.

Do you have any special items that you need to insure separately, such as jewelry or business equipment? Those items should be listed in your application. Before you commit to and purchase new coverage, make sure the policy you are applying for has all the features you want and deductibles you can manage.

Step 3. Make the switch effective by canceling the old policy

Once your new policy is processed and in place, you can cancel your existing homeowners insurance policy. Depending on your insurance company, you may be able to do this over the phone, or you might need to do it in writing. In some cases, your new insurance company may handle this part for you, but make sure it’s done so you don’t pay for two policies or miss out on any refunds.

Step 4. Notify your mortgage company

If you have a mortgage, the company needs to be notified of the change. Usually, the new insurance company will send the mortgage company proof of insurance, and they’ll contact you to verify it. It’s a good idea, however, to contact them yourself to be sure.

Make sure you have on hand the following information:

  • The name and address of your current company
  • The name and address of the new company
  • Your mortgage loan number
  • Your old and new homeowners policy numbers

Insurance is a requirement of your mortgage, and if the company receives a cancelation notice without a new policy, it can cause problems.

When to switch homeowners insurance companies

It makes sense to switch homeowners insurance companies any time you can lower your rate and improve your coverage. However, some life changes make it an especially good time to shop around – such as when you purchase a new home.

Start shopping for insurance as soon as a seller accepts your offer on a house, Lori Conarton, spokesperson for the Insurance Alliance of Michigan, says.

"It is a big investment, and you want to protect it starting the day you walk through those doors as owners,” she says.

If you’re moving to a bigger house or downsizing to a condo, your insurance needs are changing. That means a different insurance company might be better able to serve your needs.

There are other times you should consider switching, such as when your renewal comes in and you see a big rate increase. Renewal is the easiest time to change to a new home insurance company since you just won’t renew the old one and start the new one instead.

How to change homeowners insurance with escrow

For homeowners who have an escrow account set up with their lender, the mortgage company will make a payment to the new insurance company. You’ll need to make sure there’s enough in your escrow account to cover it, especially if you are changing mid-term. 

Although you pay your homeowners insurance as part of your monthly bill, the mortgage company pays it in full at each renewal. So, if you’ve paid for one policy and change before renewal comes up, the escrow account may fall short. Call your mortgage company to discuss it.

Why change home insurance companies?

There are several reasons to change your homeowners insurance carrier. Shopping around is a great way to make sure you “get the best price, service and coverage,” Conarton says.

Four common factors that might cause you to shop around are:

  1. Price. If your rate is going up, or even if it’s not, shopping around can save you a lot of money. It’s always worth checking.
  2. Discounts. It might be worth switching to bundle your auto and home insurance and get a discount, and other discounts can be a factor as well.
  3. Service. Consider shopping around if you haven’t been satisfied with the service you receive, whether it’s regular interactions or during a claim.
  4. Coverage. A new insurance company might offer additional insurance -- such as sinkhole coverage -- or less restrictive coverage than you can get with your current carrier.

How to manage payments while changing homeowners insurance

Your new company might want payment immediately. In fact, it might not start coverage until it receives a check. Keep the effective date in mind when telling your current carrier when to cancel your homeowners insurance policy.

Your mortgage lender might agree to send the check on your behalf, using money from your escrow account. Be sure to clarify with your lender what its payment practice is and whether it will send the check for you.

Ask about any refunds your current carrier might owe you. Your insurance company might send the money to your mortgage lender or to you. If you get the money directly, your lender may ask for it. Find out where to send the payment to keep your escrow account in good standing.

Risks of changing home insurance companies

Some risks to consider when switching insurers include:

  • A penalty for early cancelation of your current policy
  • Losing discounts such as a loyalty discount or bundling discount
  • The risk that your new insurance company doesn't live up to its reputation for customer service or claims

Frequently asked questions about changing home insurance companies

Can you switch home insurance at any time?

Yes. You can change insurers at any time. However, if you have a claim in process with one company, that company will complete the claim process before canceling your policy. You can switch home insurance companies after a claim and you can also switch home insurance in the middle of the year.

If I cancel my home insurance, do I get a refund?

Yes, you will be refunded for the remainder of the policy term from the date of cancellation. You will not receive a refund on any period of time you were covered by the policy.

Is there a penalty for canceling home insurance early?

Sometimes. That depends on what is specified in the fine print of your homeowners insurance policy. If you discover there is a penalty to cancel early you’ll need to decide if the savings with the new policy are worth it.

Can home insurance be transferred?

No. Home insurance is issued to a specific person and can’t be transferred to anyone else.

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