What to Know About Switching Car or Homeowners Insurance Companies

Most people don’t think about their car or homeowners insurance much. They buy the coverage they need, set up automatic payments and often forget about it unless they have a claim. But circumstances can change, and sometimes switching car or homeowners insurance companies can make sense. Before you make the move, here’s what you need to know.

When Should You Consider Switching Insurance Companies?

If you’re happy with your insurance company, you may have no reason to think about switching. On the other hand, if any of the following four situations apply, it may be time to look for a new insurance provider.

• Your costs have gone up. When your policy renews, you may see a premium increase. Insurance costs can rise for many reasons, including higher repair and rebuilding costs. Premiums can also increase after a claim. However, a steep premium increase may prompt you to shop around.
• Your policy isn’t being renewed. If your insurance company has notified you that your policy won’t be renewed, you don’t have a choice. To maintain coverage, you need to find a new insurance provider.
• You had a bad claims experience. You’re paying the insurance company so it will take care of you in the event of a claim. If you had a claim and you didn’t feel taken care of, you might decide it’s time to switch.
• You think you’d be happier with another carrier. Maybe you’re unhappy with the level of service or your premium payment options. Maybe you’ve heard good things about a different company and want to give it a try. Ultimately, it’s your choice.

Could Switching Save You Money?

Every insurance company approaches underwriting a little differently. As a result, you may pay less with a different carrier – or you may pay more. You won’t know until you get a quote.

You may also qualify for discounts. For example, if you currently have your homeowners policy with one company and your car policy with another company, moving both policies to the same company could result in a discount.

Look Beyond the Premium

It’s easy to compare costs with different insurance companies, but there’s a lot more that deserves your attention. You’re paying for coverage, so you want to make sure the coverage fits your needs. Although a lower premium can be appealing, price alone doesn’t tell you whether a policy is a better value.

When comparing insurance options, ask:

1. What are your deductibles? If you have a claim, you may have to pay the deductible amount. Some policies have more than one deductible. For example, your homeowners policy may have a separate deductible for high-value personal items that you’ve listed individually.
2. Is the service good? When you have a question or need help, are you happy with the customer service experience?
3. What’s the claims experience like? If you haven’t experienced a claim, you can read reviews to see what others say.
4. Are you comparing the same coverage? Look at more than the basic homeowners premium. Check your coverage limits, exclusions and whether you need separate hurricane or flood coverage.

An Insurance Agent Can Help You Compare Options

An insurance agent can help you understand your coverage needs, compare options and apply for a new policy. When looking for an agent, you need to know two things:

• Does the agent charge a fee? Many insurance agents earn their income through commissions that are paid by the insurance carrier, meaning you don’t have to pay the agent anything. However, some agents charge fees. You should ask before you agree to work with an agent.
• Is the agent captive or independent? A captive agent generally represents a single carrier and only sells that carrier’s policies. An independent agent contracts with multiple insurance companies and can offer options from different carriers.

Avoid a Gap in Coverage

Before canceling your existing policy, make sure your new coverage is in place and confirm its effective date. Even a short gap could leave you without protection if a loss occurs.

Don’t Forget to Notify Your Lender

If you decide to switch insurance companies, you’ll need to meet your lenders’ requirements.

Lenders typically require insurance. If you switch without providing proof of your new coverage, your lender may believe your insurance has lapsed. If the lender does not have evidence of the required coverage, it may eventually purchase force-placed insurance and charge you for it.

Avoid this by notifying your lender and providing proof of your new coverage, such as a copy of the declarations page. Also let your insurer know about your lender; you may need to list the lender on your insurance policy.

Are you thinking about switching insurance companies? FICOH’s insurance network includes 26 independent agencies that are ready to help you explore your options and find the right coverage. Find an agent.