Switching insurance companies can be tempting, especially when you see a premium increase on your existing policy. There are some risks to switching, but virtually no risks to shopping around. Here’s what you need to know:
Key Takeaways
- No two insurance policies are the same, so a one-to-one switch is impossible.
- You should compare every element of each policy to determine which one offers coverage that suits your needs.
- Premium rates can increase on policy renewal, so don’t be surprised if your rate jumps a year after switching.
Switching on your policy renewal date can help you avoid cancellation fees. - Recent claims will be noted by other insurance companies, so it’s not always a good idea to switch after claiming, especially if your claim is still ongoing.
- When there are changes to your home or lifestyle, it may be a good idea to look into switching coverage.
You can also look into switching coverage yearly, as a part of your yearly insurance review, before you renew your policy. - Purchase your new policy before cancelling your old one to avoid coverage lapses.
- Our brokers can help you determine whether switching insurance providers is right for you, then walk you through the entire process of switching.
Understanding The Risks Of Changing Home Insurance Companies In Surrey
How Switching Can Affect Your Coverage In Surrey
Home insurance policies are specific to the property they are insuring and the person who is taking out the policy. When you switch coverage from one provider to another, it is very likely that some elements of your coverage will be different. To ensure that there are no gaps in your coverage, we highly recommend comparing insurance policies side-by-side. Here’s what you should look at:
Policy Limits: The main policy limit on your home insurance policy will be on your house; this value should reflect the current value of your home. You should also compare the policy limits for personal items, as well as your level of liability coverage.
Exclusions and Endorsements: Different policies will exclude different risks; one policy, for example, may have overland water (flooding) coverage, while another does not. Comparing exclusions (what the policy will not cover) and endorsements (add-ons that increase or broaden coverage) will help you compare apples to apples. In Surrey, where flooding is somewhat common, exclusions and endorsements can matter a lot.
Deductibles: The deductible is the amount of money that the insurance company will not pay if you make a claim; for example, if you have a $1000 deductible and you make a claim that the insurance company agrees to pay in full, it will pay the total amount of the claim minus $1000. Higher deductibles typically mean lower premiums because you’re taking on more risk.
Other Coverage Details: Other coverage details, like whether or not the policy offers actual cash value or replacement value coverage, will affect how much the policy can pay out in the event of a claim. Be sure these details are the same if you want a more accurate comparison.
Potential Costs & Hidden Fees
The most important cost to consider when switching home insurance policies is the cancellation fee. These costs are set by the insurance company. We recommend changing insurers on your policy renewal date if possible; this way, you won’t incur cancellation fees.
There should be no hidden fees for transferring from one company to another, but there is one potential unexpected cost: Premium increases. All insurers typically increase their premiums over time; you may transfer from an insurance company that has recently increased premiums to one that plans on increasing rates soon. Your insurance broker can help you determine how likely it is that your premium will see a substantial rate increase when your policy renews.
Who Faces The Most Risk When Changing Home Insurance Companies In Surrey?
Surrey Homeowners With Recent Claims
A recent claim may have increased your existing home insurance premiums; that makes it tempting to change insurance providers. You should know, however, that insurance providers all have access to your claiming history, so a new insurer will also know about the claim you’ve made, and your claiming history will be reflected in the premium it offers.
We also typically recommend waiting until a claim is resolved before switching insurance companies; if a claim has not been resolved and your property is damaged, it may change which company is willing to insure you and what it is willing to insure. Beyond that, working with two or more insurance companies that have covered the same property can get complicated quickly.
Strategies To Minimize Risks When Switching Home Insurance Companies In Surrey
Comparing Policies & Coverage Options
We recommend reviewing your insurance policy every year to help ensure that you have adequate coverage; if you’re considering changing insurance companies, it’s the perfect time to do a comprehensive policy review. Do you want replacement value coverage for your home? Do you need more liability insurance? Do you want coverage for flooding?
By taking a step back, determining what types and levels of coverage you need, then comparing what’s being offered by different insurance companies (including your current insurer), you’ll be able to find policies that are well-suited to your needs; after that, comparing premiums is going to be a lot easier.
Timing Your Switch For Maximum Savings
We’ve mentioned that switching on your policy renewal date is best. There are a few other times when switching tends to make the most sense
- When you are moving to a new home
- When you’re starting or have completed renovations on your home
- When you start working from home
- When you’ve had new security features installed in your home
- When there are changes to your surroundings, i.e., a new fire station was built closer to your home
- When you’ve acquired something else you want to insure (like a rental property), you may qualify for multi-policy discounts
When Switching Home Insurance Companies Might Be Worth It For Surrey Homeowners
Potential Savings Vs. Risks
While some insurers will offer discounts to long-standing customers, there is virtually no risk to shopping around; in the worst-case scenario, you don’t find another insurer offering a policy that works better for you than your current policy, and you stay with your current insurer.
Consult with one of our insurance brokers to determine if you face any real risks by switching insurance providers; if you don’t, then switching on your policy renewal date may have many advantages. You might find lower premiums for similar coverage, or similar premiums for expanded coverage. There’s no harm in looking!
Expert Tips For A Smooth Transition
- Once you’ve found a policy you like, start by buying your new policy; this ensures there won’t be a lapse in coverage.
- Notify your existing insurance company that you’ve switched; tell them the effective date of your new policy. When you switch insurers before your renewal date, you may face fees, but you will also be refunded the unused premiums you’ve paid.
- Let your lender know that you’ve switched insurance companies if you have a mortgage.
Work with an insurance. - Work with an insurance broker the whole way through to help keep the process as smooth as possible.
Ready To Switch? Coughlin Insurance Can Help Surrey Homeowners
As experts on home insurance in Surrey, we can help you compare policies from different insurance companies, giving you the insight you need to determine whether or not switching insurers is right for you. Get in touch with us today; our brokers are here to help!