After purchasing a house, you may find that you are paying too much for your home insurance coverage. Luckily, you can switch home insurance companies at any time. Before switching, though, make sure you have everything in order to avoid any mistakes, such as inadequate coverage amounts or a gap in coverage.
How to switch home insurance companies
Step 1: Determine coverage. First, determine how much coverage you need.
When determining the amount of coverage you need, consider the following factors:
- Cost to rebuild your home: First, determine how much it would cost to rebuild your home if necessary. To do this, multiply the square footage of your home by the construction cost per square foot. You can learn how much this is by contacting your local builders association, a real estate agent, or your home insurance agent.
- Inventory of personal belongings: Make an inventory of all of your personal belongings and how much it would cost to replace them. For more valuable items, consider taking out increased coverage just for those specific items.
- Deductible: Before an insurance company pays out, you must first meet your deductible. Deductibles usually range from $500 to $1,000, but homeowners can opt for deductibles up to $10,000 or more. This can save you money on your home insurance costs, as the higher your deductible, the lower the premiums. Just make sure you have enough money on hand to cover the deductible if your house is damaged.
- Liability insurance: Liability insurance protects you if someone gets injured while on your property. If you have a lot of assets, such as other properties or retirement and savings accounts, consider getting an umbrella policy to cover your assets if the injured person takes you to court.
- Any additional coverage: You also need to consider additional coverage, such as insurance for other buildings and structures on your property. And while many home insurance policies include additional living expense coverage in case you need to stay somewhere else while your house is being repaired, make sure that it is an adequate amount.
Step 2: Current policy. Determine your terms and conditions with your current policy.
You should also check to see whether your current insurer charges any fees or penalties for cancelling your policy early. You could also receive a refund for any months you have remaining on your old policy after the switch.
As an alternative, you could wait until your current policy’s expiration date to switch. Just make sure to give your old home insurance company plenty of notice, 30 to 60 days, as to when the switch is to occur.
Step 3: Shop around for home insurance. Get quotes from a variety of different companies.
To get a quote, fill out the required fields on the insurance company’s Website. Some common information that the company might ask for includes:
- Your zip code
- Your home address
- Your name
- Your date of birth
- Your telephone number
- Your email address
- The name, gender, and birthday
- Whether you currently have home insurance
- When you want the policy to begin
- The home purchase month and year
- Any previous addresses
- Whether the home is your primary residence and whether you plan on renting it
- How many people live in the home
- Whether you have any pets
- Year your home was built
- Square footage of the house
- Whether the home is a single or multi-family home
- The style of house
- The foundation type
- The type of roof and the year it was installed
Alternatively, you could call and talk to an agent. Some of the more popular home insurance companies include:
- Farmers Insurance
- Liberty Mutual
- State Farm
- The Hartford
- Travelers Insurance
Step 4: Set up the new policy. Before cancelling your old policy, make sure to have the new one set up and ready to go.
Some factors you need to consider before cancelling an old policy include:
- Making sure to set the start date on the new policy for the same day or after the old one cancels
- Talking to your old insurance company to cancel your old policy
- Getting any refund the old insurer owes you for months of unused coverage.
Depending on the company, you should get at least part, if not all, of your money back for unused coverage.
You can easily switch home insurance companies by following the proper steps. Making sure you have no gap or break in coverage is the biggest factor to keep in mind when switching.