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How to Change Homeowners Insurance

by Bronwyn Timmons

Homeowners insurance rates vary from one company to another, and changing insurance providers can be an effective way reduce your monthly bills. The process of changing homeowners insurance companies is fairly straightforward. However, if you're not careful and don't plan the timing of your switch accordingly, you could experience a lapse in insurance coverage. A lapse in homeowners insurance can result in penalties from the mortgage company -- and the risk of losing your home if a disaster strikes before your new insurance is in effect.

Request price quotes from multiple insurance companies. Prices can vary from company to company, so to find the best price, it's imperative that you shop around. Compare both the premium prices and deductibles offered by potential companies to those associated with your current policy.

Determine which company will provide you the best rate and coverage. Ensure the plan you select provides the amount of coverage your mortgage company requires. Most lenders require that you insure at least 80 percent of your home's value.

Complete the application process for your chosen insurance company. Answer all application questions truthfully and disclose any special items you need insured such as jewelry, furnishing and other home assets.

Pay the premium required by the new insurance company. This payment is required before the new coverage can begin. Schedule the date you want the new policy to go into effect.

Call and cancel your old homeowners insurance policy. Ensure your new policy has kicked in before cancelling your old one. Request a refund from your old insurance company for the unused portion of any prepaid premium.

Call your mortgage company and provide proof of your new insurance. Some mortgage companies will allow you to provide this information over the phone while others will need written proof.

Tips

  • Check your current policy before switching to make sure there are no early termination fees. If such fees exist, wait until the end of the policy term to switch and schedule your new insurance to go into effect the day your old policy ends.
  • Consider using an insurance agent to find the best deal available on homeowners insurance. Agents have expert industry knowledge and networking connections and may be able to secure you a lower rate than you'd be able to obtain on your own.
  • Combine multiple insurance policies through the same company to score a discount on your homeowners policy. For example, you can save by insuring your home, car and recreational vehicles through the same company.

Photo Credits

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