Can I Change Home Insurance After A Claim? A Complete Guide

Home insurance is a vital protection for homeowners, but sometimes you may want to switch to a different provider or policy.

Maybe you are unhappy with your current insurer’s service, rates, or coverage options.

Maybe you have found a better deal elsewhere, or you want to bundle your home and auto insurance.

Whatever the reason, you may wonder if you can change home insurance after a claim.

The answer is yes, you can switch home insurance companies at any time, even if you have an open or recent claim.

However, there are some things to consider before you make the switch, such as timing, cancellation fees, coverage gaps, and lender approval.

Changing home insurance policy
Changing Homeowners Insurance After a Claim | PolicyScout

In this article, we will explain how to change home insurance after a claim and what to look out for.

How to Switch Home Insurance After a Claim

Switching home insurance after a claim is not very different from switching at any other time. You just need to follow these steps:

  • Review your current policy and claim status.

Check your policy’s declarations page to see your coverage limits, deductibles, exclusions, and expiration date.

Also, check the status of your claim and how much you have been paid or expect to be paid by your current insurer.

You may want to wait until your claim is settled before switching to avoid any complications or delays.

  • Shop around for quotes from different insurers.

Compare the coverage, rates, discounts, and customer service of various home insurance companies.

You can use online tools like Bing to search for home insurance quotes and reviews.

Look for a policy that meets your needs and budget.

  • Apply for and purchase your new policy.

Once you have chosen a new insurer, fill out an application and provide any required documents, such as proof of ownership, inspection reports, and previous claims history.

Pay for your new policy and get a confirmation of coverage from your new insurer.

  • Cancel your old policy.

Contact your current insurer and inform them that you want to cancel your policy.

You may need to provide a written notice or fill out a cancellation form.

Ask for a confirmation of cancellation and a refund of any unused premiums.

  • Notify your mortgage lender.

If you have a mortgage on your home, you need to inform your lender that you have changed your home insurance provider.

Provide them with a copy of your new policy and proof of payment.

Your lender needs to approve your new insurer and update their records to avoid any issues with your loan.

READ MORE : What Happens If I Let My Home Insurance Lapse? How To Avoid It

Things to Consider When Changing Home Insurance After a Claim

While you have the right to change home insurance after a claim, there are some potential drawbacks that you should be aware of.

Home Insurance Claim| Benedicts
Home Insurance Claim| Benedicts

Here are some things to consider before switching:

  • Timing.

The best time to switch home insurance is usually when your current policy is about to expire or renew.

This way, you can avoid paying cancellation fees or having overlapping coverage.

However, if you have an open or recent claim, you may want to wait until it is resolved before switching.

This can prevent any confusion or disputes between your old and new insurers over who is responsible for paying your claim.

It can also help you avoid being denied coverage or charged higher rates by your new insurer if they consider you a high-risk customer due to your claim history.

  • Cancellation fees.

Some insurers may charge you a fee for canceling your policy before the end of the term.

The amount of the fee depends on your insurer’s policies and the remaining time on your contract.

You should check with your current insurer how much they will charge you for canceling and whether it is worth switching now or later.

  • Coverage gaps.

When changing home insurance after a claim, you need to make sure that there are no gaps in your coverage.

A gap occurs when your old policy ends before your new policy begins, leaving you unprotected for a period of time.

This can be risky if something happens to your home during the gap, such as another damage or loss.

To avoid coverage gaps, you should coordinate the start date of your new policy with the end date of your old policy.

Ideally, they should be the same day or overlap by a few days.

  • Lender approval.

If you have a mortgage on your home, you need to get approval from your lender before changing home insurance after a claim.

Your lender has an interest in protecting their investment in your property and may have certain requirements for your home insurance provider and policy.

For example, they may require that your new insurer has a certain financial rating or that your new policy has adequate coverage limits and deductibles.

If you fail to inform or get approval from your lender when switching home insurance, they may consider you in default of your loan agreement and take action against you, such as imposing penalties or foreclosing on your home.

Here is an article I wrote on how much does insurance increase after a claim:

How Much Does Insurance Increase After a Claim?

Insurance is a way of protecting yourself from financial losses due to unexpected events, such as accidents, theft, fire, or natural disasters.

However, filing a claim with your insurance company can have some consequences, such as increasing your future premiums.

image of lapsed insurance
What makes Insurance lapse [PHOTO COURTESY OF EXPERIAN]

How Insurance Works

Insurance is based on the principle of risk pooling, which means that a large number of people pay a small amount of money (premium) to an insurance company, which then uses that money to pay for the losses of those who suffer a covered event (claim).

The insurance company calculates the premium for each customer based on the probability and severity of the potential losses.

When you file a claim with your insurance company, you are asking them to pay for your loss or damage according to the terms and conditions of your policy.

Depending on the type and amount of the claim, your insurance company may decide to increase your premium.

This is because your claim indicates that you are more likely to file another claim in the future.

How Much Insurance Increases After a Claim

The amount of insurance increase after a claim depends on several factors, such as:

  • The type of insurance:

Different types of insurance have different rates of increase after a claim.

For example, car insurance tends to increase more than home insurance after a claim, because car accidents are more frequent and costly than home damage.

  • The type of claim:

Some claims have a bigger impact on your premium than others.

For example, at-fault claims, where you are responsible for causing the loss or damage, will raise your premium more than non-fault claims, where someone else is liable for the loss or damage.

Similarly, liability claims, where you have to pay for someone else’s injuries or property damage, will increase your premium more than comprehensive claims, where you only have to pay for your own vehicle or property damage.

  • The amount of the claim:

The higher the amount of the claim, the more likely your premium will increase.

This is because larger claims indicate that you have suffered a more severe loss or damage, which may make you more prone to future claims.

  • The frequency of claims:

The more claims you file within a certain period of time, the more likely your premium will increase.

This is because frequent claims suggest that you are either careless or unlucky, which makes you a higher risk for the insurer.

  • The location:

The location where you live or drive can affect how much your premium increases after a claim.

This is because some areas have higher rates of crime, accidents, natural disasters, or lawsuits than others, which increases the risk for the insurer.

  • The personal factors:

Your personal factors, such as your age, gender, marital status, credit score, driving record, and claims history can also affect how much your premium increases after a claim.

These factors reflect your level of responsibility and risk-taking behavior, which influences how likely you are to file a claim.

Conclusion

Changing home insurance after a claim is possible and sometimes beneficial for homeowners who want to save money or get better coverage.

However, it is not a decision that should be taken lightly, as there are some risks and challenges involved.

You should weigh the pros and cons of switching and follow the proper steps to ensure a smooth transition.

By doing so, you can enjoy the peace of mind that comes with having the best home insurance for your needs.

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