Do I get reimbursed my premiums if I switch homeowners insurance companies?

If you switch homeowners insurance companies in the middle of a billing period, or after pre-paying your premiums with the company, you will be entitled to receive the unpaid and unused portion of your premiums back. You may be charged a handling or processing fee if you cancel a pre-paid policy, but if you pay a monthly premium you will usually be reimbursed for the prorated portion of your premium.

Your insurance policy should clearly outline the procedure for canceling the policy and how any pre-paid premiums will be handled. The typical method is to send you a check for the amount due to you, minus any handling or early cancellation fees the insurance company may charge. If you do not see this information your homeowner's policy, call the customer service department of your insurance company and ask to have the question resolved.

You can make it easier on yourself if you postpone changing insurers until your current policy period expires. To do that, simply wait until you are in the final month or so of the policy before you shop for a new policy, and establish a starting date that matches the expiration of your current policy. Once you have the new coverage in place, notify your insurer that you will be changing companies at the end of the policy period, and then notify your mortgage company of the change in coverage. You will not get reimbursed anything, but you will not have to pay penalties or fees, either.

Keep in mind that some insurance companies have a specified waiting period before a homeowners policy goes into effect. If your new policy has such a waiting period, it might be better to let the two policies overlap for that time period, preventing any lapse in coverage. You will essentially have to pay a double premium, one for the old policy and one for the new, but your house will be protected during the transition.