How do I change homeowners insurance companies?

Complete Guide to Changing Homeowners Insurance Companies

Why This Question Matters for Colorado and Utah Residents

In Colorado and Utah, where home insurance premiums are 35% above the national average and natural disasters like hail and wildfire are routine, many residents are facing premium hikes or policy cancellations. Knowing how to switch insurance companies safely is vital for protecting both your home and wallet.

• Sharp premium increases: Many homeowners have seen 50%+ annual rate hikes, especially after claims or regional catastrophes.
• Coverage gaps are risky and costly: Even one day without proper insurance can expose you to financial loss, and mortgage lenders require continuous coverage by law.
• Local regulations require precision: Colorado’s HB23-1174 mandates at least 60-days’ notice for cancellations, and lenders expect immediate notification if your policy changes.

What Most People Get Wrong

Biggest regional mistake: Allowing coverage to lapse between policies, often while trying to "shop for a better price" amid rising rates. In Colorado, a gap in coverage—even for a day—can result in up to a 20% jump in premiums and put your mortgage at risk.

Many also forget to notify their mortgage lender, leading to force-placed insurance at much higher cost. Regulations and lender requirements are strict here—don’t miss a communication step.

The Complete Picture

Changing homeowners insurance can be done at any time, not just at renewal. Here’s how to make it smooth and safe:

1. Research local insurers and get quotes. With average premiums at $3,320 in Colorado and Utah, comparing options can yield significant savings—just remember to focus on coverage as well as price. Ask about wildfire, hail, and water backup endorsements, as these perils drive 70% of claims in the region.

2. Choose your new policy and align the start date to the cancellation date of your existing coverage. New policies should start before or the same day your old one ends—never after. Colorado law now mandates a 60-day non-renewal notice from insurers, but you are free to cancel at any time. Just be sure to confirm acceptance and payment before canceling the old policy.

3. Notify your mortgage company immediately with proof of the new policy. Most Colorado and Utah lenders require up-to-date insurance to protect their investment. If they don’t get notice, they may buy expensive lender-placed coverage and add the cost to your loan bill.

4. Avoid lapses at all costs. Lapses can trigger coverage restrictions, premium increases, and even policy denials. Regional data shows that two claims or a coverage gap may lead to non-renewal or surcharges up to 25%.

Switching intelligently protects your home, keeps you in good standing with your lender, and could save hundreds—or even thousands—per year given today’s volatile market.

Making the Right Decision for Colorado and Utah Residents

Question 1: Am I switching only for a lower price, or for better overall protection?

Before you change insurers, consider:

• Is the new policy covering hail, wildfire, and water backup as well as my current one?
• Does it offer replacement cost or just actual cash value? (Replacement cost is key in high-cost rebuilding states like CO and UT.)

Question 2: What’s my timeline and what must I coordinate?

Be strategic—line up your new policy start date before cancelling your old coverage, and notify your mortgage lender right away. Overlap by even just 24 hours if you want extra certainty—better slightly double-covered than uninsured for a day. Set reminders for policy effective dates, notifications, and payments.

Question 3: What are the long-term effects on my risk and costs?

Check if switching will reset your claims-free discount or impact your eligibility for future coverage. In wildfire-prone counties, some homeowners found switching at the wrong time led to higher non-renewal risk or loss of premium discounts. Understand your home’s risk profile and plan for future insurance needs, not just this year’s bill.