If you are a current homeowner with a mortgage, you almost certainly have homeowners insurance, and probably donât give it too much thought.
This could be a mistake, because shopping around and comparing rates periodically could save you money. People who stick with the same provider year after year, just because it seems like it might be a hassle to change homeowners insurance, are potentially leaving money on the table.
Homeowners considering a switch might do so for a variety of reasonsânot just cost. Some homeowners might decide that bundling makes sense and change insurers to one that covers both home and vehicles. And, in some areas of the country, natural disasters have led to a shakeup in the insurance market, causing homeowners to search for other options.
Whatever your reason for considering a switch, there are things you can do to make the change easier.
Pay attention to timing
First and foremost, donât cancel your current homeowners insurance policy until you are covered by your new one. A lapse in coverage can put you at risk, and having a gap between insurers could lead to higher premiums.
Next, check your current homeowners insurance policy to see if there are any cancellation fees. It might make sense for you to wait to change carriers until your policy is up for renewal so that you donât get charged a fee.
Notify your lender
This is particularly important if you pay your homeowners insurance through escrow. Money held in an escrow account is a common method of paying bills such as property taxes or insurance. Small amounts are deposited each time you make a mortgage payment, and the funds are held by a third party. This helps to budget for billsâsuch as property taxes and homeowners insuranceâthat are paid once or twice a year.
If your homeowners insurance is paid through escrow, you will need to notify your lender about your decision to change insurers, so that the payments reach the right company. And, if you pay your homeowners insurance separately, youâll want to alert your lender so the correct information is on file.
In either case, you will likely be asked to send the lender a copy of the insurance declarations page. This is so they can verify you are fully covered, as this is likely a requirement of your loan.
Gather information before getting quotes
Having the information you need pulled together ahead of time will help make the process of securing quotes far easier. Some of the questions youâll be asked are quite basic, such as do you live in the home full-time, or is it a second home? And, who lives in the house with you?
A home inventory is a good idea for everyone with homeowners or renters insurance, but having an up-to-date list of your belongings is very important as you search for quotes. Think of any new furniture or upgraded technology youâve purchased. Clothing, housewares, jewelry and watches, electronicsâthe longer weâre in our homes, the more we seem to tend to accumulate. Your âstuffâ would probably cost more to replace than you might think. A current home inventory can give you a better understanding of how much personal property insurance you should get.
Youâll be asked about home security features, such as burglar alarms and window locks. If you have smart home features that provide warning if a system is failing, mention them. Some insurers offer discounts for these features, since these systems allow preventative maintenance to take place and reduce claims.
Have your homeâs details listed in one place. The age of the home, construction materials, square footage, style, the age of the roof, and all of the systems such as HVAC, water heater, should be readily available as youâll likely be asked these questions as part of the quote process.
Be ready to answer questions about fire protection, such as the location of the closest hydrant and fire station. Youâll also be asked about fire safety features in the house, like fire alarms, sprinkler systems, and fire extinguishers.
Does your home have any special features? These should definitely be mentioned as you are getting quotes. A gazebo, an in-ground pool, hot tub, a trampolineâsome of these items add to your risk, and all of them would cost money to replace if damaged or destroyed in a covered event, so make sure to mention them.
Do you have any pets? Pets can add to your risk profile, so youâll likely be asked this question when you are getting quotes.
Getting the coverage you need
If youâre staying in your home but considering changing insurers to lower your premium, make absolutely sure that a new, less expensive policy offers the same level of coverage. Before you make the switch, compare the policies side-by-side. If there are differences, ask questions and make sure you understand what your new policy covers.
On the other hand, if youâre switching homeowners insurance companies because youâve moved to another state and your old carrier doesnât offer policies in your new state, it might be difficult to make a direct comparison. By relocating, your risk profile has changed and so your premium will likely change too.
How can I get homeowners insurance quotes?
If youâve moved, remember that insurance is regulated by states, so there could be substantial changes in your policy. You might be required to purchase additional coverage that reflects changed risks, such as hurricane insurance, or earthquake coverage.
Contact the experts at Rate Insurance for help in this process. Theyâll work with you to get homeowners insurance quotes, and ask the right questions to ensure youâre getting the policy you need to protect your home.
Disclaimer:
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate Insurance does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate Insurance. Rate Insurance, its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
