It is common practice to look and shop around first before making a large acquisition. After all, it is logical to seek the lowest price for anything you are looking to purchase. With this in mind, it is also important to shop around to ascertain if you are getting the best rates on your home insurance. However, the majority of people have never taken the time to shop around for homeowners insurance. Unfortunately, most people do not even realise that shopping around for homeowners insurance is an option. Here is a guide on shopping around and the steps to take when switching homeowners insurance.
Can I change my proprietor’s cover at any time?
The general notion is that you are unable to make changes to your policy. However, your mortgage lender is less concerned about who your insurance company is. Your lender’s primary focus is whether you have adequate homeowners cover. Thus, you can change insurance companies at any time if you feel you are not getting the best value for your policy.
How to change homeowners insurance
Although it is a massive step, changing homeowners insurance is relatively simple if you sufficient knowledge of what you are doing. Here are some factors to consider when you are shopping for homeowners insurance.
1. The coverage you need
Firstly, you need to have a profound grasp of the insurance cover that you require for your home. As such, before shopping around for other insurance companies start by studying your current policy. It is essential to assess the coverages and amounts included in your policy. With this in mind, you must ensure that your new policy provides you with similar or better coverages. To help you come up with a fair comparison consider evaluating your deductibles as well as your monthly premiums. This will aid you to do a side-by-side comparison thereby allowing you to make an informed decision.
2. Shop around
Secondly, when you are equipped with the relevant information about your premiums and coverage, you can start to shop around. Identify the top homeowner insurance providers and engage them to get quotations. Remember not to only focus on the price but also the coverages that are in the policies. After all, you do not want to compromise your cover for the sake of saving a little money. If you have undertaken any home improvement projects then your home’s value will have increased. As such, this will have an impact on your monthly premiums.
3. Talk to your lender
Once you have settled on a new insurance provider then it is time to inform your lender. Your lender will need to verify that your new insurance policy provides sufficient cover. Moreover, your mortgage lender has the task of updating the institution handing funds from your escrow account. An escrow account is an account set up by your lender to pay for items such as homeowners insurance and property taxes.
4. Buy a new policy before cancelling the old
Finally, it is time to buy your new homeowners insurance policy. Your new insurance policy must come into effect before you cancel the old policy. This is very important to ensure there are no gaps in your coverage. You must receive written notice of the cancellation of your old policy.