Talking With Insurance Companies

The need for change is more widely discussed when it comes to auto insurance policies, but with homeowners' insurance, it is often overlooked. No rule states you have to keep the same insurance coverage on your home forever. You have the right to shop around and make a change whenever you see fit. You just want to go about the process the correct way.

Consider Why You Want to Change

Yes, you can change your homeowners' insurance for any reason, but given all that goes into the process — only do so when necessary. For example, changing companies because you can get the same coverage at a lower rate makes sense, but changing simply because the company is new, and you have heard good things might not make sense.

Weigh All the Factors

Always read every line in the quote you are provided. It is common for a new policy to offer incentives in one area but reduce your coverage in another. For example, the new company might give you a higher value of coverage for your household belongings at a lower cost, but the new company will also depreciate your household goods, whereas your existing policy does not. Look at every line item to see what makes the most sense.

Determine the Exact Date

Review your existing policy to determine the exact date you want to end your current policy and enact the new policy. You never want to cancel a policy and have a lapse of coverage before the new policy is effective. Anything could happen during that period, and sadly, you would not be covered. Have one policy end at 11:59 pm and the other begin at 12:00 am.

Get Confirmation

Always get confirmation from your current insurance company that the policy will be terminated. Often, the cancellation process is largely the responsibility of the agent. If for some reason they do not cancel the policy, not only will you have to pay the premium for the new policy, but the other insurance company could also charge you.

Inform Your Lender

Until your loan balance reaches zero, your mortgage lender has a great deal of liability in your home. As a result, they will demand that you maintain homeowners' insurance. To prevent the mortgage company from receiving a notification for a lapse of coverage, which could come with a penalty, let the lender know right away when the policy change has been enacted. 

Make sure you do your research to make sure you make the right change. Start with an insurance company like Illinois Insurance Center Inc.