Homeowners insurance is something that everybody that owns a home must deal with. If you are considering switching insurance companies, the process can be a little confusing. Here are the steps that you need to take in order to change your homeowners insurance.
The first thing that you need to do is find the company that you are going to switch over to. You will want to shop around and make sure that you are getting the best rate available. You can do this in a number of different ways. Check out some independent review sites and see who is rated as the best company for insurance. Get a few rate quotes online and then visit an agent. They will be able to tell you what everything costs and give you an idea if you are better off than you were. Choose the best company that fits your needs and is within your budget.
Once you decide on a company, you will have to do the necessary paperwork to get a policy. You can usually do this in a few minutes while you're sitting in the office of the agent that you chose to work with. They will have a few forms to fill out and you will be ready to go. They will ask you some basic questions about the property including the value of the property and if you have any special items to be insured. You will have to decide on the coverage limits and the features that you want.
Cancel Existing Insurance
Once your new insurance is effective, you need to cancel your existing policy. This is usually pretty easy to do as all you have to do is make a phone call. Just call the company that provides your policy and let them know that you would like your policy cancelled as of today. If you are owed any prepaid premiums, they will refund you in some cases. They will usually send you a document that says your policy has been cancelled and then you are done with them.
Notify Mortgage Company
Many homeowners have their insurance payment set up as part of their monthly mortgage payment. They pay one payment to the mortgage company and the mortgage company takes care of everything from there. They pay the real estate taxes associated with the property as well as the insurance premium. If they handle this payment for you, they will need to know who they are paying now. Some companies will allow you to give them the information over the phone. Other companies will want you to fill out a little bit of paperwork to get everything transferred over properly. Once this is done, you are officially done with your homeowner’s insurance changes.
Do you have to pay a premium when switching homeowners' insurance?
When you switch homeowners' insurance policies, you will have to pay your premium to the new insurance company immediately. Your coverage will not go into effect until the premium has been received by the insurance company. If the company did not receive your premium, it could potentially have to pay out a claim to you before getting anything from you. In many cases, you will have paid money into escrow with your mortgage payment every month. Therefore, your escrow company may be able to make the premium payment for you out of the money that you have already paid.