What will typically happen when I’m switching homeowners insurance companies?
UPDATED: Jul 17, 2013
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Asked July 17, 2013
You have the right to switch home insurance companies any time you want to do so. If your home insurance is bundled with your mortgage, you will have to work with the lender to do so, but you cannot be forced to keep an insurance company you are not satisfied with.
A common misconception is that you cannot switch companies if you have an open claim. Even if you have a current claim with the home insurance company, you are entitled to shop for and get a replacement policy. As long as your premiums were current at the time the claim was filed, the insurance company is required to honor it under the terms of the policy.
Start by getting some online home insurance quotes from a site such as this one which offers free quotes and comparisons. That way, you can enter the information for your quote a single time and get quotes from multiple leading competitors. When you have found a company that seems to offer what you need at a price you want to pay, check them out with a company such as the A.M. Best financial ratings company to find out how well they compare in the financial world. The A.M. Best Company uses a simple letter grade to show you at a glance whether a company is financially stable or suffering from financial uncertainty.
Before you switch to a new insurance policy, you will have to give the current company sufficient notice. Most insurance companies request at least one billing cycle notice or the equivalent of 30 days for most policyholders. The best idea is to find your replacement company, set a date for the start of coverage, and then contact your insurance company with a cancel date for the old policy. Then overlap policy coverage by one or two days to avoid possible delays, but do not overlap policies for an extended period.
If you have prepaid your home insurance for a year or more, you will receive a refund of the unused portion of your premiums, minus handling fees. In most cases, you should receive a check within no more than 60 days, and you should probably contact the insurance company after the first 30 days have elapsed.
Answered July 17, 2013 by Anonymous