When purchasing home insurance, it’s often incorporated into the home purchasing process, but only shopping during the final stages of the process could lead to missed savings. The insurance team of Bankrate talked to experts in the industry about when and how to maximize your shopping behavior, as well as why it’s beneficial to shop for insurance even if you’re not planning a relocation.
What is significant about shopping for home insurance?
When purchasing home insurance, it’s important to consider that it’s a crucial step in the acquisition of a home, but what about when you already have a home and have a policy? Purchasing a current home insurance policy can have significant advantages.
Whether you’re interested in improving the customer experience, increasing coverage, lowering prices or enhancing the company’s alignment with your values, there are multiple reasons why people will switch out of their current homeowners insurance provider.
– SEAN BURGESS, PRESIDENT OF THE INSTITUTION OF LEMONADE.
shopping online and comparing the quotes of home insurance, even if you’re not purchasing a new home, can help you assess your current concerns and determine if your policy and insurance company can address those concerns. Even if you chose the most appropriate home insurance company for your particular needs when you originally purchased your home, your requirements may have altered. Perhaps you should seek out a lower rate, a specialty insurance option or a local agent.
However, many homeowners take out a policy when they first purchase their home, but they fail to review the needs of their coverage over time. Stephen C. Crewdson, J.D. The Power director of Insurance Business Intelligence explained to Bankrate that there is “local anecdotal evidence that you are more likely to shop when purchasing a home than other days.” This suggests that existing home insurance policyholders could be missing out on an opportunity to find better coverage.
Should you buy home insurance even if you aren’t purchasing a home?
It may not be effective. Karen Collins, the vice president of Property and Environmental for the American Property and Casualty Insurance Association, concurred that there were only benefits associated with purchasing homeowners insurance.
In reality, many homeowners are seeking insurance outside of the home purchasing process. Data from TransUnion indicates that home insurance purchasing was elevated throughout the year 2023, despite the increasing popularity of mortgages that led to a historic low in home sales. With home insurance premiums increasing, Bankrate hypothesizes that consumers are more inclined to spend time and money on finding the best rates or insurance companies, even if they aren’t purchasing a home.
“ purchasing insurance for homeowners isn’t simply a matter of moving homes.” Burgess explains. If you’re unhappy with your current homeowners insurance provider or simply want to know if there is a better option out there, it’s worth exploring your options.
olicing home insurance quotes doesn’t necessitate a contract to buy a new policy. Also, many consumers believe that receiving insurance quotes negatively affects their credit scores. However, that is a legend. Insurance companies in the majority of states utilize credit as a factor in the rating, but they utilize a “soft” check that has no direct impact on your credit. All in all, there is no negative aspect to purchasing home insurance.
However, there are numerous benefits to shopping. Let’s discuss the different benefits of outdoing the competition.
The benefits of shopping for your home’s insurance.
You may have a lower rate
Despite recent evidence that inflation is decreasing slightly, it still poses a threat to the majority of households. Because different insurance companies have different rates, you may have a lower cost of insurance – and extra breathing space in your budget – by shopping around.
“Some people said that they were shopping because of the price,” Craddockson said to Bankrate. The percentage of people who say they’re shopping because of the price has increased over the year. In 2024, the average annual premium for $300,000 in home insurance is $2,151. It doesn’t necessarily follow that the current policy you have is the most affordable option when you initially sought to cheaper things. shopping around allows you to contrast prices in order to find the cheapest insurance for your particular needs.
Just consider if you should reduce coverage in order to lower the rate. Goosehead Insurance conducted a study of 2,000 American homeowners and observed that 57 percent of them would be willing to sacrifice coverage for a lower cost.
While it may seem like a solid strategy to conserve money, this is also a hazardous one. Reducing your insurance can lead to higher out-of-pocket expenses following a claim, which would lead to a greater degree of financial detriment than paying for the extra coverage in the first place. If you’re unsure of how much home insurance you need, you may want to discuss your situation with a licensed agent during the shopping process rather than submitting an online quote.
When is the best time to buy home insurance?
Learning when to buy home insurance is random, it can occur for any reason or cause. Having a negative experience with a customer service agent or claims is a legitimate reason to seek out a new provider. The way you communicate with your agent can have a significant impact. The use of digital technology and constant availability may enhance your life more than a limited-time agent.
You may have more comprehensive coverage
The cost of the insurance is not the sole factor in the purchasing of home insurance. Also, studying the competition can help you find more effective coverage.
Collins told Bankrate that with inflation, supply chain issues, and an increased demand for skilled labor and building materials as a result of natural disasters that have occurred, the cost of rebuilding homes and businesses has increased significantly. This means that even if you have not altered your home, you may need to increase your limits. Your current insurance provider can provide you with a quote for any necessary alterations to your policy, but shopping around can help you find a better or more specialized insurance provider.
If you notice a lower cost when shopping, this may also allow you to increase your insurance coverage while still maintaining your budget. You may discover that, with a company that has lower rates, you can add extra endorsements or increase your liability insurance, for example, you can do this without exceeding your financial capacity. If you can locate a lower cost home insurance quote, it can reduce the total cost of your home.
Your home insurance’s requirements may have changed.
If there is one universal truth, it is that change is impermissible. Whether the alteration is abrupt or gradual, your life will transform, and when this occurs, your insurance requirements will also change. Home insurance shouldn’t be considered a singular, “put it on” product.
While that may be effective for some homeowners, the majority of people will have a different experience during their tenure as homeowners. For instance, perhaps you required the cheapest insurance to assist you in covering the various costs associated with being a first-time homeowner. Over the course of several years, you may have more money to spend on your homeownership. Perhaps you made alterations to your residence, purchased higher-end items, hosted more guests or welcomed a new family member.
All of these factors could lead to a demand for more or different types of home insurance. As your particular needs evolve, so will your home insurance. Remember that home insurance is primarily a financial endeavor. It’s intended to safeguard your finances from the effects of unexpected losses in the home, so it’s crucial to assess your risk level as your life evolves.
Additionally, shopping can be utilized as a means of good touchpoint to review the limits of your insurance in general. During the pandemic’s height, home enhancements in popularity increased. If you’ve altered your home significantly – such as by adding a screened porch or enhancing the roof – you should inform your insurance provider of these changes, in order to re-examine your needs.
