Almost every home insurance company is reasonable concerning add-on coverage for new basements, pets, or even major reconstructive work. However, there are times when a homeowner finds themselves in need of a new insurance company, due to a move, poor service, or simply a lack of coverage.

Thankfully, switching from one home insurance provider to another is a simple process, although it differs depending on whether or not you pay your premium out of an escrow account or your own pocket and whether you switch at renewal or mid-term.

If escrowed and switching at renewal:

Contact your lender at least 30 to 60 days in advance of your home insurance policy renewal and instruct them not to pay the renewal for your old insurer. You have the right to choose your own insurance provider, but they must meet certain standards as set out by your lender. Depending on the geographic location of your home, a lender may require you carry flood insurance, and this won’t change if you decide to switch policies.

Your lender’s main concern is that you are carrying some kind of coverage. If you are unable to maintain coverage, you will end up with lender-placed or “forced” coverage, which can be much more expensive.

Authorize payment to the new insurer. Be sure to cancel your old policy, as your former provider will continue to charge you if they have your credit card or checking account information. To avoid a lapse in coverage, don’t cancel the old home insurance policy until the new one is in place.

If escrowed and switching mid-term:

Contact your lender to see if they can make the new payment to the new insurer and use the refund from the prior insurer to bring the escrow account back in balance. You may have to make the new payment yourself and, depending on how you make that payment, apply the refund to your own account or credit card balance.

If no escrow and switching at renewal:

Contact your old insurer and cancel their policy, effective on the date of renewal.

If no escrow and switching at mid-term:

Same as above. Be sure to cancel your prior policy so that you won’t be charged by your old insurance provider.

Almost all home insurance companies will have an easy-to-access toll free number where the process of beginning a new policy or switching over an old one can begin. Once the terms have been agreed upon, often all that is left is to cancel the old insurance policy and move it to the new company. Many companies now offer a service whereby they will contact your old home insurance provider and arrange for a transfer of all documentation and responsibility.

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