Switching home insurance, including with escrow
You don't have to wait for renewal. You do have to do it in the right order.
Most home insurance policies can be cancelled at any time, and the unused premium is generally refunded, although the method and any fee depend on the insurer and the state. So you can switch mid-term if you find better coverage or a better price.
If you have a mortgage, your lender pays the premium from your escrow account and is named on the policy. That adds a few steps, and skipping them is how people end up paying twice or briefly uninsured.
The order that avoids a gap
- Compare quotes with the same dwelling limit, deductibles and personal property basis as your current policy.
- Buy the new policy with a start date. Don't cancel anything yet.
- If you have a mortgage, give the new insurer your lender's mortgagee clause and loan number, so the lender is named on the new policy.
- Send your mortgage servicer the new declarations page and ask them to pay the new insurer from escrow and stop paying the old one.
- Cancel the old policy in writing, effective the same day the new one starts.
- Watch for the refund of unused premium and your next escrow statement.
How escrow changes things
Your servicer pays the premium from escrow, usually once a year. If you switch mid-term, the new insurer may want the first premium before the servicer has processed the change. Some servicers will pay a new insurer quickly; others ask you to pay and then reimburse you.
Where the old insurer's refund goes depends on the insurer and servicer. It may come to you, or go back to the servicer. If it comes to you and your escrow account then runs short, your monthly payment can go up at the next escrow review. Ask both before you cancel.
When switching mid-term isn't worth it
Some insurers charge a cancellation fee or calculate refunds on a short-rate basis, which keeps part of the unused premium. If an open claim is being handled, finish it or check how switching affects it. And if your home is hard to insure, make sure the new policy is actually bound before you cancel.
Common questions
Usually, yes. Most policies can be cancelled mid-term with a refund of unused premium, though some insurers charge a fee or keep part of it. Start the new policy before you cancel the old one.
Buy the new policy naming your lender, send the new declarations page to your mortgage servicer so it pays the new insurer, then cancel the old policy effective the same day.
It depends on the insurer and servicer. The refund may be sent to you or returned to your escrow account. Ask both before you cancel.
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This page is general information, not advice about your specific circumstances. A licensed insurance professional can tell you what’s actually available to you.
General information only, not insurance advice. Coverage, availability, and terms vary by insurer and by state, and are subject to underwriting. Quote My Policy LLC connects you with licensed insurance professionals. Nothing here binds coverage.