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What to do When You Want to Change Homeowner’s Insurance Companies

One of the biggest reasons people stay with their current insurance company isn’t because they’re so happy with the service. It’s because the thought of changing homeowners’ insurance companies is so overwhelming. 

Despite this popular belief, changing your homeowner’s insurance isn’t as difficult as it might seem on the surface. This process can be distilled down into three steps:

  1. Buy your new homeowner’s insurance policy
  2. Cancel your existing coverage
  3. Notify your escrow account if applicable

To help ease your hesitations, let’s walk through this process in a bit more detail.

When Can You Change Homeowner’s Insurance Companies?

There’s no set timeline for when you can change your homeowner’s insurance companies. Typically, we recommend waiting to make the switch until it’s close to your renewal date. That’s because, in some cases, there is very rarely an early cancellation fee. Still, the option to switch providers is always available.  

It’s important to note the timeline of when you cancel your policy. We always recommend having your new policy in place and activated before canceling your old policy. Without that overlap, you risk not being insured. 

Notifying Your Escrow Account About Your Homeowner’s Insurance Company Change

If you have an escrow account, you will need to notify your lender about your homeowner’s change. If you do not inform your lender about the change and receive a notice from your old insurance company that your policy was canceled, they could force place insurance. 

When notifying your lender, you’ll need to share details of your new policy. They will also need to verify that your new policy meets their coverage requirements. 

Can You Change Homeowner’s Insurance Companies After Filing a Claim?

Another common reason people hesitate to switch homeowner’s insurance companies is that they’ve had to file a claim. Filing a claim doesn’t mean that you cannot get a new policy. Your old insurer will see that specific claim until it’s settled or denied. It is typically best to wait until your claim is closed before changing insurance carriers. 

What to Know About the Homeowner’s Insurance Refund Check

Some homeowner’s insurance companies will provide you with a refund check. This can happen for several reasons, including: 

  • You cancel your policy before it expires
  • Your lender makes a payment to your old insurer

When you receive that refund check, you must forward it to your mortgage lender so that it can be added to your escrow account. Without forwarding it to your lender, you may not have adequate funds to make your new premium payment and your monthly mortgage payment will increase. 

We’re Here to Help

McGrath Insurance Group is here to help you navigate this process and give you peace of mind that you won’t miss an important step. Contact us for help getting the process started or request a proposal if you want to see what’s available to you from other homeowner’s insurance providers.