When to shop for homeowners insurance

A common time to get home insurance is when you’re buying a home, but it’s also smart to shop for a policy after renovations or a significant life change, or if you're dissatisfied with your current coverage or rates. You also may need to shop for coverage if your insurer cancels or non-renews your policy. 

Read on to learn more about when to shop for coverage, what information you’ll need to purchase a policy, and how to choose the appropriate date to start your coverage.

When to get insurance for a new home

In most cases, mortgage lenders require borrowers to carry home insurance until the home loan is paid in full. They may ask for proof of coverage three days before your closing date (when the home officially becomes yours). So, it’s a good idea to start shopping once you've signed the purchase agreement on your new home. This will give you ample time to compare your options.

Without coverage, your lender may purchase a policy on your behalf. This is often more expensive than a policy you may find on your own.

Other reasons to shop for homeowners insurance

Besides buying a new home, there are other reasons you may want to shop for a new policy.

After a cancellation or non-renewal

You may want to cancel your policy because you’re unhappy with the customer service or it’s too expensive. Or your insurer may decide to refuse to renew your policy because your home is too risky to insure. 

Whatever the reason, be sure to purchase a new policy before your current one ends. Being uninsured leaves your home financially exposed to potential damage. Additionally, having gaps in your coverage can lead to higher insurance premiums.  

If you’re struggling to qualify for coverage, visit your state’s FAIR Plan website. This program is designed to help high-risk homeowners obtain insurance for their property.

After making renovations

Recently renovated your home? It’s possible that you’ll need to increase your dwelling coverage policy limit to account for the improvements. This is especially true if you have upgraded your home with high-end features, such as custom cabinetry, marble countertops, or hardwood flooring.

A higher policy limit will ensure you have enough coverage to rebuild your home with the same high-quality materials in the event of a major loss. Note that having more coverage typically results in higher premiums. 

By contrast, renovations that lower your risk can result in reduced premiums. For example, upgrading your old roof to one with impact-resistant materials makes your home more resilient to storms. As a result, you may earn a discount on your policy.

Changes to your personal assets

A standard home insurance policy covers your personal property, such as furniture and electronics, but its coverage is usually limited. Most items are only protected up to their actual cash value, which takes into account depreciation. Additionally, coverage is often limited to damage from specific hazards, referred to as perils. Covered perils are listed in your policy documents.

Consider increasing your coverage if you’re adding valuable items like jewelry or artwork. 

You can do so by scheduling your personal belongings or getting a personal articles floater. 

Change in household 

If you’re recently married — congrats! Insurance companies often offer discounts for married policyholders, which can lower your rates. If you’re divorced and your ex-spouse no longer lives with you, be sure to unlist them from your policy. 

If you’re living with a partner but aren’t married, be sure to add them as a named insured on your policy. This provides coverage for their personal belongings and liability. It also means they can file claims, make policy changes, and receive payouts.

You may also need more personal property or liability coverage for adult children. If they move out, you can reduce that coverage to save money. 

Adjustments to your risk profile 

Your risk profile can change even if you haven’t moved. When that happens, you may need to update your policy to stay fully covered. Here are some common scenarios that can affect your risk profile:

• Attractive nuisances: Attractive nuisances are features that seem appealing, especially to children, such as pools and trampolines. However, they increase the risk of injuries and the possibility of lawsuits. For example, a child could slip and injure themselves near the pool, resulting in medical bills that you may be responsible for. 

• New pet: Welcoming a new dog into your household is an exciting moment, but it also comes with increased liability, especially if your dog has a history of aggression or is a restricted breed. 

• Increase in net worth: If you receive a huge inheritance or a large settlement, you may want more insurance to help you protect your new assets.

In all these cases, increasing your liability coverage is a smart move. Umbrella insurance is a solution that provides additional liability coverage without significant premium increases. 

What you need to purchase a homeowners insurance policy

Many insurance companies offer online quotes, but sometimes you’ll need to call. Some may ask for more information, while others may ask for less because they can pull details from public records and pre-fill your application. Regardless, it’s a good idea to have the following ready when purchasing your policy:

• Personal information (e.g., name, date of birth, gender, marital status)

• Home’s exterior and interior construction type

• Age and condition of the home and roof

• Details about safety features (e.g., smoke detectors, security systems)

• Previous insurance claims or loss history

• Desired coverage types and effective date

How to choose an effective date 

Your home insurance's effective date is the day, month, and year your policy becomes active. As mentioned, most mortgage lenders require proof of insurance at least three days before your closing date. So, your effective date should align with that timeline. However, avoid starting your policy too early; you could end up paying for coverage before you actually need it.

If you’re switching insurers, you can set the start date to the day your current policy ends (or the day before to be safe). This ensures that you don’t have any gaps in coverage and that you continue to remain protected.