Moving up but tempted to keep the old house as a rental? What your mortgage allows, how lenders count rental income on your next loan, the insurance and tax changes, and the honest landlord math.
Reshopping Homeowners Insurance Without Losing Coverage
If your mortgage payment keeps creeping up, the culprit is usually hiding in escrow — and more often than not, it’s homeowners insurance. Premiums have climbed steeply across Colorado in recent years. The good news: unlike your tax bill, your insurance is a competitive market. You can reshop it any time, switching is easier than people think, and loyalty is not rewarded — insurers routinely price new customers better than renewing ones.
Why did my premium jump when I never filed a claim?
Because most of the drivers aren’t about you: rebuilding costs (labor and materials) have risen sharply, Colorado’s hail and wildfire losses have pushed rates statewide, and reinsurance costs get passed down to everyone. Your clean claims history helps — it just doesn’t exempt you from a hardening market. Which is exactly why comparison shopping works: carriers price the same risk very differently.
How to reshop the right way
1. Pull your declarations page. It’s the one-page summary of your current coverage: dwelling limit, deductibles, liability, endorsements. Every quote you gather should match it line for line — otherwise you’re comparing prices of different products.
2. Compare coverage, not just premium. The classic reshopping mistake is “saving” $400 by quietly taking on a worse policy. Watch:
- Dwelling coverage — enough to rebuild at today’s construction costs (not the market price of the home).
- Deductibles — especially the separate wind/hail deductible common in Colorado, often a percentage of dwelling coverage. A cheap premium with a 2% hail deductible can cost you five figures at the first storm.
- Replacement cost vs. actual cash value on the roof — an ACV roof clause is a common place cheap policies hide.
- Water/sewer backup and other endorsements you currently carry.
3. Get 3+ quotes. An independent insurance agent can shop many carriers in one pass. Bundling with auto often helps; so can asking about wildfire-mitigation and impact-resistant-roof discounts.
4. If you’re in a wildfire zone, availability itself can be the issue. Don’t cancel anything until a new policy is bound — and know Colorado created a FAIR Plan as a last-resort backstop for hard-to-insure properties. Mitigation work (defensible space, ember-resistant vents) can both widen your options and earn discounts.
What about my escrow account?
Switching insurers mid-loan is completely allowed — your lender only requires that coverage be continuous and adequate. The clean sequence:
- Bind the new policy first, effective on or before the old one ends. No gap, even a day — a lapse can trigger costly force-placed insurance from your lender.
- Tell the old insurer to cancel as of the new effective date, and tell your servicer — they’ll pay the new carrier from escrow going forward.
- The old insurer refunds unused premium to you (if it was escrow-paid, consider applying it to any escrow shortage).
- Expect the next escrow analysis to true things up — a lower premium eventually means a lower payment.
This guide is part of our Homeowner Library. And if a lower premium has you looking at the rest of your payment, a Colorado Springs mortgage broker can walk you through which pieces are actually movable.
Frequently asked questions
Can I change homeowners insurance if I have a mortgage and escrow? Yes, any time. Bind the new policy first, avoid any coverage gap, and notify your servicer so escrow pays the right carrier.
Will switching insurers lower my mortgage payment? If the premium drops, yes — after your next escrow analysis reflects it. The loan itself is unchanged.
What should match when I compare quotes? Dwelling limit, all deductibles (especially wind/hail), replacement-cost provisions, liability, and endorsements. Identical coverage, then compare price.
What if insurers won’t write my home because of wildfire risk? Work with an independent agent, document mitigation, and as a last resort look at Colorado’s FAIR Plan backstop.
By Timothy Chase, Founder, 719 Lending — Colorado Springs mortgage broker. NMLS #868175 (Company NMLS #1601989). Equal Housing Opportunity. This article is educational only and is not financial, tax, or legal advice; program details and figures are general — confirm current. Insurance details vary by carrier and policy — confirm with a licensed insurance agent. 719 Lending is not affiliated with or endorsed by any government agency. Last updated: July 2026.
Related Posts
