Insurance renewal

What is a home insurance renewal?

Like most Insurance renewals, a home insurance renewal is when you decide if you want to continue your homeowners insurance for another term. Most home insurance policy terms are a year, so your insurance renewal date is one year after your effective date. However, your provider needs to notify you that your renewal is coming up by sending you an insurance renewal letter.

The insurance policy renewal process

In a lot of situations, insurance renewals happen automatically. That’s certainly true of most home insurance renewals. But even if your insurance company renews automatically, it’s usually legally required to notify you beforehand. The laws governing this practice vary by state, but most policyholders get a renewal letter a month or so prior to their policy’s expiration date.

An insurance renewal letter typically includes information about your:

• Premium.
• Deductible.
• Coverage amounts.

For example, your dwelling coverage may change if construction costs go up in your area because that makes it more expensive to rebuild after a catastrophic event. That increase may also impact your premium.

Once you receive a home insurance renewal letter, you can either accept your insurance company’s offer or shop around for a new policy. Doing nothing generally means you accept the offer and your insurance company renews your coverage. But if you decide not to renew, then you need to contact your insurer. Some may need your cancellation notice in writing.

Home insurance renewal checklist

One reason you get your insurance renewal letter a month before your expiration date is so you have time to dig into the new policy. You’ll want to look for:

• Changes to your premium. Your rate may go up or down depending on events that occur during the life of your previous policy. Some you don’t have much control over, like inflation or or an increased exposure to risk. But the claims you file can also impact your costs.
• Coverage adjustments. Your dwelling coverage may adjust with construction costs, but that’s not the only way your coverage might change. Your insurer might add exclusions in some cases. And remember that personal property, loss of use, and other structures limits are percentages of Coverage A, so modifying your dwelling coverage affects the others.

You also need to let your insurer know of any changes in your situation, such as:

• Home remodeling projects.
• Newly purchased valuables.
• Updates to your roof.
• Changes to your wealth.
• A new dog.
• A new security system.
• Any new family members or roommates.

A few of these changes may mean you need to pay a higher premium, like a remodeling project that adds square footage to your home. Not disclosing them, however, could mean claims are denied later on. Moreover, certain upgrades, like a new roof or burglar alarm, may reduce your costs. Either way, make an appointment with your insurance agent to discuss your renewal.

How can I lower my home insurance premiums?

Homeowners insurance premiums don’t always go up at a renewal, but when they do, it can be frustrating for policyholders. If you’re in that situation, here are a couple of steps you can take that may help you get a lower premium:

• Ask about discounts. Most insurance companies offer discounts for actions that benefit them, like signing up for paperless policies or installing security systems.
• Increase your deductible. A higher deductible means you pay more in a claim, so choose an amount that fits your budget.
• Look for a new insurance company. Every insurance company has its own way of determining price, so you may find a more affordable policy if you shop around.

If you decide to look for a new insurance company, use the details on your renewal letter to compare offers. You also want to lock in your new coverage and alert your insurance company that you’re canceling before your old policy expires. That way you avoid spending any time uninsured.

And as long as you’re shopping for home insurance, get a quote from us!