can I change home insurance company before the end of the previous one

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Mar 5, 2011

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Insurance Question from Fort Worth, TX

Asked on 03/05/2011

can I change home insurance company before the end of the previous one my insurance premium is embeded in my mortgage payment, and I need to get out of that, it will make it cheaper if I pay for it myself.

Answer given on March 11, 2011

You can change your insurance at any time and there should be no penalty involved with the change.  If your mortgage company is paying the premium through an impound account (part of your monthly payment is taken to pay your insurance premium) it can complicate things.  You may not have the option of doing away with the impound account, since lenders often require the premiums be impounded if your loan is more than 80%.

When you cancel the current policy, the premium will be refunded to the mortgage company, since they are the payor.  Then a down payment, or the full annual premium is required to start the new policy and you may have to come up with that payment.  It is probably best that you discuss your plans with the mortgage company so they will be aware of what will be happening. 

It may be easier to wait until the renewal date of your policy, since it will be less complicated.  You would simply tell the mortgage company you are changing companies and be sure to cancel the prior policy.  Your agent should be able to assist you in this change.

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