What You Need to Know about Changing Homeowners Insurance
Most of us shop our coverage and switch insurers to save money, finding a better deal is always a great incentive to switch.
In most cases, your home is both your biggest and most valuable asset. Protecting this valuable asset is a necessity and the best way to do that is to have a comprehensive homeowners policy. A homeowners policy helps cover the cost of rebuilding your home and replacing your possessions it they are destroyed due to a covered peril such as natural disasters or accidents.
There is any number of reasons that you might be looking to switch your homeowners insurance policy. Most of us shop our coverage and switch insurers to save money, finding a better deal is always a great incentive to switch. A bad customer service experience might also lead you to shop your coverage or maybe your current insurer just doesn’t offer the coverage you want. Regardless of the reason you are switching there are a few things you should be aware of before canceling your policy.
Shop Your Coverage
Before you can change insurers you have to find a new policy that suits your needs. Experts recommend shopping your coverage on a regular basis and getting at least 5 to 6 quotes before making a decision. Ask friends and family, as well as colleagues for recommendations. Make sure you are comparing apples to apples as far as coverage levels and deductibles. Look for companies that are nationally known which will ensure that they are financially viable. At HomeInsuranceKing.com, we can provide up to 12 quotes and help you shop the best carrier and coverage option available to you. Our shopping process makes it easy and hassle free so you get the quotes you need and the service you want. You can easily shop and compare home insurance quotes with us today!
Paper Work
Before canceling your current policy you should secure a new policy. While it is unlikely your application will be turned down, insurers do rate risk differently and have proprietary algorithms that help them determine both rates and if you are an appropriate risk. Wait until you have been approved for a new policy at the appropriate coverage limits before canceling your current policy.
The application process is usually fairly straightforward and quick. You will have to answer a few questions about your property as well as any special or high-value items you wish to have insured.
Break it Off
Once the new policy is effective it’s time to call your old insurer and cancel your policy. In most cases, this should be as simple as making a phone call. A call to your agent or service center letting them know you want to cancel your policy as of today should be enough to get the job done.
If you are owed a refund they should send that to you along with a letter stating your policy has been canceled and you are no longer a customer.
Don’t Spend that Refund
While your first instinct may be to go out and spend that refund, don’t. You may owe that money to your mortgage lender. Most homeowners combine their insurance with their mortgage payment. They send one check every month to their mortgage company who applies the payment to the mortgage balance, and also pays the property taxes and insurance premium. When switching insurers you must notify your mortgage company about the switch so they can make payments to the correct insurer. This may be as simple as a phone call or you may have to fill out some paperwork to make the switch official.
Tips to Save Money on Homeowners Insurance
Here are three important tips that can help lower your premium when shopping for a new policy:
- Bundle it Up: Almost all insurance companies offer a discount to customers who carry multiple policies with the same company. Bundling your auto and life insurance with the same company can result in up to a 25% discount.
- Raise Your Deductible: When you switch insurance companies consider raising your deductible, as long as you can afford it. Pushing your deductible up $500 can shave 25 percent off of your premium. Always make sure you can easily afford whatever deductible you choose.
- Improve Your Credit Score: Insurance companies give your credit score a lot of weight so if you have a poor credit rating do whatever you can to improve it. Verify all information on your credit report and dispute any information that is incorrect. Pay all bills on time and pay down any debt. As your score improves, notify your insurer.