Main Reasons for Switching Home Insurance
Should you switch your home insurance? Switching home insurance providers is a common practice in Canada, and there are several good reasons why homeowners choose to do so.
Switching your home insurance is relatively straightforward, but you’ll need to make sure you avoid gaps in home insurance coverage or unnecessary fees.
Western Financial Group, a 100% Canadian company, can help you navigate your home, car, boat, and business insurance during this period of economic uncertainty.
Switching your insurance is easy and you can save
Switching insurance companies is easy with Western Financial Group
- We’ll do the insurance shopping for you
- We’ll get you competitive quotes
- We’ll find you the best coverage for your needs.
- Do you qualify for discounts for home insurance
- Western can help you save.
Why homeowners switch their home insurance
Lower premiums / better price
Lower premiums and better prices are often the primary reasons why homeowners switch their insurance. Insurance rates can vary significantly between companies for similar coverage. Shopping around, especially at renewal time, can often reveal substantial savings. Factors that might lead to a better price include:
- New discounts: A new insurer might offer discounts for which you now qualify, such as a new roof, security system, bundling with auto insurance) that your current insurer doesn't.
- Changes to your home or circumstances: Renovations, improved safety features, or even changes in the neighbourhood's risk profile (e.g., new fire station nearby) could result in lower rates from a different provider.
- Competitive market: The insurance market is competitive, and companies frequently adjust their pricing to attract new customers.
Better coverage
You might find that your current policy is too restrictive or doesn't offer the specific coverage you need. Reasons for seeking better coverage include:
- Changing needs: You've acquired valuable new possessions, started a home-based business, or made significant renovations that require higher coverage limits or specialized endorsements (e.g., for certain collections, increased liability).
- Specific perils: Your current policy might not adequately cover certain risks prevalent in your area (e.g., overland flood, earthquake, sewer backup) or a different insurer offers more comprehensive options for these.
- Higher limits: You may want higher limits for personal property, additional living expenses, or liability coverage than your current policy offers.
Poor customer service or claims experience
Poor customer service is a major reason for dissatisfaction with an insurance company. If you've h a negative experience with:
- Filing a claim: Slow response times, difficult processes, or unsatisfactory claim settlements.
- General inquiries: Difficulty reaching your agent, unhelpful staff, or lack of clear communication.
- Billing issues: Persistent problems with payments or unclear statements. You deserve an insurer that prioritizes customer care and makes you feel valued.
Dissatisfaction with your broker/agent
If you work with a broker, you might feel they are not adequately representing your interests, not shopping around for the best options, or simply not providing the level of service you expect. You can switch brokers or go directly to an insurance company.
Life changes
Significant life events can mean it’s time to reassess your home insurance:
- Buying a new home: This is a natural time to shop for new insurance as rates will change based on the new property's characteristics and location.
- Getting married/having children: These changes can impact your liability needs and the value of your possessions.
- Retirement: Your usage patterns of the home might change, potentially affecting your risk profile.
How to switch your home insurance
Research and compare
Shop around for quotes from several insurers, comparing both premiums and coverage details. Consider customer reviews and the insurer’s reputation.
Apply for a new policy
Once you’ve chosen a new provider, apply for the policy and ensure it meets your needs. Be prepared for a possible inspection or additional requirements, especially if your home is older or has unique features.
Set a start date
Align the start date of your new policy with the end date of your current one to avoid any lapse in coverage.
Cancel your old policy
Notify your current insurer in writing that you’re canceling the policy. Confirm any cancellation fees or refund procedures if you’re switching before your renewal date.
Document everything
Keep written confirmation of your new policy and the cancellation of your old one for your records.
Inform your mortgage lender (if applicable):
If you have a mortgage, your lender will require proof of home insurance. As soon as your new policy is active, provide your mortgage company with the details of your new insurer and policy number. They will likely require proof of coverage.
Final thoughts
Do your research and get multiple quotes before switching your home insurance. You’ll also need to make sure there are no gaps in your home insurance coverage when you switch insurance providers. As a homeowner, make sure that you get the best insurance protection at the right price for you.
Top 5 FAQs about switching home insurance
When is the best time to switch home insurance?
The renewal date of your current policy is generally the best time. This allows you to switch without incurring any cancellation fees from your old policy.
Will I have to pay a cancellation fee if I switch mid-policy?
Potentially, yes. Most insurance policies have terms and conditions regarding early cancellation.
Types of fees: Short-rate cancellation fees: These are higher penalties where the insurer keeps a larger portion of the premium for the time you were covered.
Pro-rata cancellation fees: The insurer refunds the unused portion of your premium directly, with no additional penalty.
How do I make sure there's no gap in coverage when I switch?
Never cancel your old policy before your new policy is confirmed and active.
Will my claims history affect my new insurance rates?
Yes, your claims history is a significant factor in determining your premiums. If you have a history of frequent or large claims, you may find that new insurers quote higher rates or are less willing to offer coverage.
Should I use an insurance broker or go directly to an insurer?
Here’s the difference:
An independent broker: Works for you, not one specific company. They can shop around with multiple insurers to find the best rates and coverage that fit your needs. They can also provide advice and help with claims.
Direct insurer: You deal directly with the insurance company. This might sometimes lead to slightly lower administrative costs, but you're only getting an insurance quote from that one company. You'll need to do the legwork of comparing multiple direct quotes yourself.
