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Before You Cancel: How to Switch Home Insurance Without a Coverage Gap
The order that keeps the house covered, the two moves after bind, what comes back from the old policy, and the one page to read before you sign anything.
The answer
Bind the new policy first, dated to your closing or to the day your current policy expires. Cancel the old one effective that same date, never before. Tell your mortgage company, so escrow points at the new policy. In that order, nothing lapses, nothing double bills, and the unused premium comes back pro rata. Send us the declarations page first, because a few policies carry a minimum earned premium that turns a quick switch into an expensive one. Bind first. Cancel on the same date. Tell the mortgage company.
The date does the work
Your new policy starts on a date you already have. For a purchase it is your closing date. For a switch it is the day your current policy expires, or the mid-term date we pick together. The old policy ends on that same date, and the house is never bare for an hour. Cancel two weeks early, as people do when they want to be done with it, and the house sits uninsured for fourteen days, and the next application asks about the gap. One date. The old policy ends on it. The new one starts on it.
Done on one date
The date
The old policy ends and the new one starts on the same day. Nothing is bare.
Cancelled early
The old policy ended two weeks before the new one started. Nothing covered the house in between.
The two moves after bind
After bind, two moves finish the switch. A call to your mortgage company, which only you can make, and a cancellation to your old carrier, which is yours to sign. The carrier takes that request from the policyholder, so the signature is always yours. If you would rather not make the call, we prepare the cancellation form, you sign it electronically, and we send it to your old carrier dated to the day your new coverage starts. The door swings both ways. The switch should be easy in either direction.
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Move one, your mortgage company
- Who makes it
- You, as the borrower
- What to say
- Your home insurance changed, here is the new policy and its start date
- Why it matters
- Escrow pays the home policy once a year, so the money has to point at the new policy
- Have ready
- The new declarations page with the mortgagee clause and the start date
- The payoff
- Money follows this call
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Move two, the cancellation
- Who makes it
- You, by phone or email, or by a form we prepare, you e-sign, and we send if you ask
- What to say
- Cancel my policy effective the date my new coverage started
- Why it matters
- Left in force, the old policy keeps billing, and the refund never starts
- Have ready
- The old policy number and the new start date
- The payoff
- The old policy stops billing
What comes back from the old policy
When you cancel a standard Texas home or auto policy, the unused premium comes back to you pro rata, and the carrier owes it within fifteen business days of the cancellation date. Since September 1, 2026, Texas requires the math to be pro rata on those policies, so the old short-rate penalty is gone. The check comes to you, not to your escrow account. Deposit it and send that same amount to your mortgage company as a one-time escrow payment, so the account that paid the old policy is made whole.
In our experience, one surplus lines home carrier's form now carries a minimum earned premium of fifty percent, a term commercial policies have carried for years, and we would rather not watch it spread to more home policies. Leave in the first month on that form and half the year's premium stays with the carrier. We have had a lead ask to switch the day after a renewal on that policy, and the honest advice was a date past the midpoint, because leaving that week would have cost thousands. A refund is the rule. A minimum earned premium is the exception to read for.
What comes back if you leave in month one, three, six, or nine, with a fifty percent minimum earned premium
- Pro rata refund
- With a fifty percent minimum earned
- Month one
- Month three
- Month six
- Month nine
The policy you are leaving may be carrying more than the house
A family cancelled with us to save a little, and the saving disappeared at the mailbox. Their flood policy had been attached to the home policy, one carrier and one bill, and the cancellation took both. They had to buy a new flood policy on its own, and once it was added back, the policy they had moved to cost more than the one they left. Flood was the piece that time. Another time it is the scheduled jewelry, the umbrella sitting on the home policy, or the bundle discount on the cars. Coverage gets packaged, bundled, and tied together in ways a bill does not show, which is why we read the declarations page before anyone switches, so no part of your portfolio is left behind. Read the whole portfolio before you cancel any part of it.
Before you sign the cancellation, look for
- A flood policy attached to the home policy, on the same bill.
- A minimum earned premium on a surplus lines policy.
- Scheduled jewelry or an umbrella riding on the home policy.
- A bundle discount on the auto that leaves when the home does.
- The roof, and how the new policy would pay it.
- Your closing date or expiration date, written on the cancellation.
When a mid-term switch is right
Most switches wait for the renewal. Some should not. A family came to us with deductibles higher than they knew they had, and a roof the carrier had moved off replacement cost after a heavy run of losses across its book. We moved them mid-term to a more established carrier, with the roof back on replacement cost, and it put a little money back in their pocket. That is the day a mid-term switch is right, when the contract and the price get better in the same move. When your risk portfolio and your wallet sing the same song, the middle of the term is the right time to move.
Switch mid-term when
- The contract gets better and the price gets better, in the same move.
- The renewal took the roof off replacement cost, and another carrier would pay it in full.
- A deductible you never chose is sitting on the policy.
- The refund is pro rata and no minimum earned premium is in the way.
Wait for the renewal when
- The policy carries a minimum earned premium and you are before the midpoint.
- The saving is small and the carrier has paid your claims well.
- The move would cost tenure a new carrier cannot give back.
- The dates cannot be made to meet.
What happens when you send it
You want one thing from this page. To switch without a gap, or to hear plainly that the policy you have is the one to keep.
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Free
Send both pages
The declarations page you have and the quote you are considering, through Home Quote Evaluation or by email to contact@mcdadeins.com.
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On our desk
We read the exit, then the entrance
The cancellation terms and any minimum earned premium on the policy you have. Then the new contract, deductible by deductible, roof included, against the one you have.
- 03
Your call
You get one of three answers
Stay, switch at the renewal, or switch now, with the dates lined up and the reason in writing. About 40 percent of the time we tell homeowners to stay with their current carrier, and sometimes even with their current agent, because that is the right answer for the family.
Read the exit before you take it.
Leaving well
The door swings both ways. When a family comes to us, we line up the dates and, if they ask, send the cancellation for them. When a family leaves us, we send the form for an e-signature, cancel on the day they chose, and hope to earn the chance to win them back. One family left us for a direct carrier and called five months later, for the first time, to tell us they had cancelled. Nobody had walked them through the next steps, so the old policy kept billing and the new one had to be rewritten. We walked them through it, and we would again. Leaving is allowed. Leaving well is the part nobody explains.
Charles McDade, LUTCF
Questions readers ask
When should my new home policy start?
On your closing date for a purchase, or on the day your current policy expires for a switch at renewal. For a mid-term switch, we pick the date together and the same date goes on the cancellation. The new policy is bound first, then the old one is cancelled effective that date.
Do I have to cancel the old policy myself?
The request carries your signature either way. You can call or email your old carrier, or ask us to prepare the cancellation form, sign it electronically, and we send it to the carrier dated to the day your new coverage starts. Left in force, the old policy keeps billing.
What happens if I cancel before the new policy starts?
The house is uninsured for every day in between, and the next application asks about the gap. If your mortgage company sees no coverage, federal rules let it buy coverage for the house in your name after two notices, the first at least forty five days before it charges you. Show it your policy and it must cancel that coverage and refund any overlap within fifteen days.
How is my refund calculated in Texas?
Pro rata, the unused days of the term, on a standard home or auto policy. The carrier owes it within fifteen business days of the cancellation date under Insurance Code 558.002, and from September 1, 2026, TDI's rule 5.7015 ends short-rate math and allows only a filed minimum retained amount. Surplus lines policies set their own cancellation terms, which is where the minimum earned premium lives.
What is a minimum earned premium?
A floor on what the carrier keeps, whatever day you leave. The Florida stamping office's consumer guide puts it at twenty five percent of the premium or more, and in our experience a few surplus lines home carriers in Texas now write fifty percent. Past the midpoint of the term the pro rata math and the minimum agree, so the date you leave is the whole decision.
What if my mortgage company already paid the old policy?
It happens, because some servicers send one insurance check a year and only when the borrower calls. The old carrier refunds the unused premium to you, not to escrow. Deposit the check, then either pay the new policy with it or send that amount to your mortgage company as a one-time escrow payment, whichever your servicer asks for. Paying the new premium by card while the check clears is fine too. We walk you through it.
Sources worth opening before you decide
- Was your home insurance canceled or not renewed?, Texas Department of Insurance, updated January 15, 2026, have a new policy in place before the current one expires, and your right to cancel early
- Texas Insurance Code 558.002, Refund of Unearned Premium, read on texas.public.law, the fifteen business day refund deadline on personal auto and residential property policies
- 28 TAC 5.7015, Refund of Unearned Premium, adopted, Texas Register, January 30, 2026, pro rata required, short rate ended, effective September 1, 2026
- Force-placed insurance, 12 CFR 1024.37, Consumer Financial Protection Bureau, the two notices before a lender can charge you for coverage it buys, and the refund of any overlap
- Understanding Florida's Excess and Surplus Market, Florida Surplus Lines Service Office, the minimum earned premium line
The purpose is to help the reader ask better questions before claim time.
Check it before you cancel
The new quote is in your hand. The exit is the part to read next.
Send the declarations page and the quote. A licensed Texas agent reads the cancellation terms on the policy you have, the contract on the one you are considering, and lines up the dates so the house is never bare. We translate the contract before you sign for another year.
The audit is free. The decision is yours. No broker fees for personal lines clients.
