Home insurance is financial protection that many people don’t give much thought to when they’re buying a new home. You’ll usually pay insurance premiums in your monthly mortgage payment along with mortgage insurance and property taxes. So, some people have a set it and forget it thing going on.
But, this isn’t necessarily a good thing if you forget about it because you should be re-shopping for home insurance once a year. If you noticed that your premiums went up by 10% or more when it’s time to renew, it’s usually a good indication that you’ll find coverage that you pay less for if you take the time to shop around. Even if your rates didn’t go up much, you want to consider shopping around annually to see if you’re missing out on a good deal.
How Often You Can Change Auto and Home Insurance
There is no hard rule that dictates how often you can shop for and change your home insurance policy, but it’s a good idea to start doing it once a year. This will help ensure that you pay the best price possible. You could even pay upwards of $400 less per year when you re-shop for your home and vehicle insurance policies.
You can switch your insurers or change your policy whenever you want, and this includes in the middle of your term. You may have to pay a small fee to cancel your policy early, but most companies will allow you to cancel for free. If you plan on swapping, you want to make sure that the effective date on your new policy will line up with your expiration date on your old policy, so you don’t have any coverage gaps.
Why You Should Shop Around for Insurance Each Year
It’s a common practice for insurance companies to change their policy costs and reevaluate their rates on a yearly basis. The industry has margins that are tighter than ever because they’ve had record numbers of insurance payouts in recent years due to climate change issues and wildfires. This can result in premiums going up.
If your premiums went up 10% or more, consider shopping around for a new policy and see if a new company offers a different rate. Comparing policies and shopping around could save you hundreds of dollars every year.
When you shop for home and auto insurance policies, you want to ensure that you’re putting out a wide search while evaluating your policy coverage and cost from small and large companies. The best way to do this is to go with an independent third party like Nsure. You want to pull quotes from multiple insurance companies
Misconceptions About Switching Home and Auto Insurance Companies
There are a few widely-believed misconceptions about shopping for a new policy on an annual basis. These things could stop people from shopping, and this means that they can easily pay more than they have to for coverage.
Shopping for New Insurance Policies is Only About Getting a Lower Rate
Shopping for a new home and auto insurance policy should be about more than just getting a better rate. You’ll also have to get a new policy if the company isn’t renewing your current policy or if the company is changing which perils they won’t and will cover in the upcoming term.
The declining profit margins in the industry have led insurance companies to scale back on the risk they’re willing to take in areas where insured losses or disasters are common. In California, for example, many companies will exclude coverage for wildfire damage. They could also not be insuring homes that are in wildfire-prone areas. In coastal areas, not offering coverage for hail or wind damage is common.
If you find that you insured your home below the replacement cost or you got a notification that there is a policy exclusion and it’s time to renew your policy, start shopping around. Even if you have to pay a little more to ensure you have full coverage on your home with a different company, it’s most likely worth it.
Staying with One Company Gives You Lower Rates
A common thing many people think about home or auto insurance is that sticking with one company for years will get you lower rates. This may be true in some cases, like if you’re a long-term customer that gets a loyalty discount or multi-policy discounts for bundling your home and auto insurance. However, it’s also possible that these discounts are getting offset by the higher rate you’re paying for your coverage.
Shopping for New Insurance is Time-Consuming
One of the biggest reasons people don’t shop for new insurance annually is because they think that it’ll take a long time. However, this couldn’t be further from the truth. As long as you have your current policy declarations page around, you could compare rates in under an hour. If you use a platform like Nsure, you’ll get quotes from over 50 of the top-rated insurance companies in the nation that you can compare side-by-side.
Frequently Asked Questions
When it comes to switching up your home and auto insurance bundle, it’s common to have a host of questions. We’ve picked out some of the most popular ones and answered them for you below.
1. Do insurance premiums go up each year?
It’s very common for your home insurance premiums to go up each year. Premium costs depend on your home’s location, age, and build. Things outside of your control can also factor in, like construction costs. If you live in an area that is natural disaster-prone, you’ll typically see your rate go up more because of construction costs.
2. Can you change your home insurance if you have an escrow?
Yes, but you’ll want to ensure that you inform the lender of the switch so they won’t keep making payments to your previous insurance entity. The new company will most likely contact your lender on their own to set up the payment details on your behalf.
Shop for Auto and Home Insurance with Nsure
If it’s time for you to shop around for auto and home insurance bundles, try Nsure. You can compare quotes from over 50 of the top-rated companies in the United States, and you can sort through them to get the best rates without sacrificing coverage to protect your home when you need it.