Changing Homeowners Insurance After a Claim

Changing your homeowners insurance may offer you lower rates or updated coverage. You can also take a step further and switch insurance companies, even with an open claim. Find out how to navigate this process and the reasons you may wish to switch providers.

Reasons to Consider a New Insurance Company

You don’t have to wait for a claim to process to shop around for better home insurance rates. By reviewing your insurance policy coverages, you can see if it may be time for a new policy quote. Remember, this process is free and won’t affect the existing policy with your provider. Here are some common reasons homeowners shop for new policies.

Processing Delays

If you’re unsatisfied with the process, you aren’t required to maintain coverage from the same home insurance company for future situations. For example, a poor customer service experience is a good reason to look elsewhere. The good news is that your current provider must fulfill the existing claim, even if you're searching for a replacement home insurance company.

Increased Rates

Filing a claim can increase your home insurance rates, so a costly premium or high deductible may encourage you to shop around for lower rates. While you are still responsible for the out-of-pocket expenses for the existing claim, you can save money later on with a more competitive insurance rate.

Keep in mind that the Comprehensive Loss Underwriting Exchange, or CLUE, database informs other insurers of your claim history. The same incident that increased your current rate may prevent you from receiving the most competitive rates from other providers.

Gaps in Coverage

While you should review your insurance policy before you need to use it, you can get to know your coverage while handling an open claim. For example, you may find there are gaps in the covered damages section of your policy. Changing your homeowners insurance at this point won’t change the deductible on open claims, but it can save you from major expenses in the future.

Check your policy to see if it still matches the replacement value of your home. You may be underinsured due to increased replacement costs. These costs have dramatically increased, caused primarily by the 340% increase in lumber prices from 2020 to 2021.

Canceled Policy

All examples so far have assumed you are dropping your homeowners insurance provider. Your insurance company, unfortunately, can also choose to drop you. If you file too many claims or fail to communicate effectively with your insurer, they have the right to drop you and cancel the insurance policy. They must still cover your open claim, but they may no longer offer you homeowners insurance moving forward.

Steps to Handle the Open Claim

As you shop around for a competitive rate, don’t forget to handle that open claim. Follow these steps for an efficient and low-stress experience after filing a claim.

Reach Out Regarding the Claim

Confirm with your current insurer that you have an open claim that’s still being processed. Some remain open due to miscommunication, so be sure you’ve sent all the correct paperwork and notified your provider; also, make sure the police have filed their report.

Document the Process

Take photos and videos to document the damage to your home or property. Try to find receipts or other evidence of the value of stolen items. Your home insurance company will send an appraiser to document the damage, but your documentation helps make the process go smoothly.

Handle Any Emergency Repair Issues

After properly documenting the damage, make arrangements to restore your home. Prompt repairs can reduce the total cost of an incident and protect your family. This is especially true if there’s running water or the exterior of your home is compromised.

Check with your provider to understand the proper steps in the repair process. Some allow you to get started before receiving reimbursement, while others require you to fully repair your home before completing the claim. Keep receipts and document the repair process.

How to Switch Homeowners Insurance Companies

Picking a new insurance company is just as easy as shopping for your first policy. Avoid common claim mistakes, like shopping for the wrong policy, and follow these steps to move forward with your change of providers.

Compare Quotes

The first step is to receive quotes from leading insurance companies. Switching to a new provider can lower your insurance costs, but in some cases, your policy may already be the most affordable for your current situation.

You can’t assume that a new company will always offer a lower rate. Remember, your claims likely caused your increased premiums. Providers across the nation have access to your claim history and can see the reasons for any changes in premiums.

Consider Policy Features

Compare home insurance policy features side by side to verify you’re comparing similar policies. Some options appear to be more affordable, but they come with a higher deductible or cover fewer incidents. Only by comparing similar policies can you find the best rates for your current situation.

Inform Your Current Provider

Don’t forget to inform your current provider about the change, or you may pay for unnecessary coverage. Call and request to cancel your policy on the date your new insurance is effective. 

Make sure you receive a notice in writing that your policy will be canceled and that you’ll receive any unused amount. Confirm that you’ll still be working with them to handle the open claim.

Learn More About Changing Homeowners Insurance

It’s possible to change homeowners insurance companies while you still have an open claim. Review providers as you explore your options for lowering your rate or expanding your coverage, and remember, don’t let a prolonged claim process hold you back from finding the best option for your home.