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Changing Home Insurance Carriers Without an Escrow Account
If you do not have a mortgage escrow account, making changes to your home insurance can be extremely quick and easy, but there are a few things you should know before you make the switch.
You can change your home insurance at any time, even mid-policy. Many people don't realize that they can cancel their insurance policy at any time for any reason. About 90% of insurance companies do not charge any cancellation fees. You can switch your home insurance even mid-policy period and start seeing the savings instantly!
There are a few quick steps you need to follow when switching your home insurance when you do not have a mortgage escrow account.
- Start the new home insurance policy before canceling the old policy. Start your new policy with an effective date (start date), a week or so in the future, to give yourself plenty of time to cancel your current policy and make sure the new policy passes the underwriting process. Since your policy is out of escrow, many home insurance companies will require a large down payment to start the policy. You might be able to find a company that will only require one month's premium down, but be prepared to pay 25 - 40% down if the best plans only differ based on the payment plans.
- Call your current insurance company to cancel your policy. Only you as the insured can legally cancel your home insurance policy. Your new agent can't do this for you. Make sure you do not cancel your current policy until your new agent verifies that the new policy has passed underwriting. If you have paid for a year's worth of insurance up-front, then you will receive a pro-rated refund check for the excess premium you paid for the time that insurance company will not cover you. If you pay month-to-month, you may not receive any refund check at all.
- Enjoy the new policy. Once you have made a down payment on the new policy and canceled the current policy, you can start to reap the benefits of the change, whether it be better price, better coverage, or better service!