Homeowners insurance companies can cancel your policy for a number of reasons. This can be very worrying as it leaves you and your home vulnerable to a variety of common hazards.
If your homeowners insurance policy is cancelled, it’s important to act quickly to find a new policy that suits your coverage and financial needs.
Here’s everything you need to know about what happens if your homeowners insurance is cancelled.
Homeowners Insurance Cancellation vs. Non-Renewal
Homeowners insurance cancellations and non-renewal notices both indicate that your insurance company does not plan to continue providing coverage to you, but there are a few differences between the two.
Your insurance company can typically cancel your policy within 60 days of the policy’s inception for any reason. After this period, they usually only cancel your policy if you stop paying your insurance premiums or if you violate the terms of your policy.
If you stop paying your premiums, or you breach your policy’s terms by, for example, lying about a claim, your insurance company can and likely will cancel your policy. This means your coverage will cease immediately.
On the other hand, non-renewal notices indicate that your insurance company is not willing to renew your policy at the end of the policy period. Your coverage will not end immediately, but you will have to find a policy elsewhere when your current policy period ends.
Non-renewal notices must be delivered before your policy ends; however, notification requirements vary by state. Generally, your insurance company must notify you 30 to 60 days in advance.
Reasons Your Homeowners Insurance Might Be Cancelled
Understanding why an insurance company might cancel your homeowners insurance policy can help you avoid the hassle of finding a new insurer.
As mentioned, cancellations typically occur when a policyholder breaks their policy’s terms or stops paying their premiums. However, during the first 60 days after your policy’s inception, your insurance company can cancel your policy for a number of reasons.
Your policy may be canceled if:
● Your credit drops too low.
● You have filed too many claims.
● You own an aggressive pet breed.
● You add potentially hazardous amenities to your home (e.g. a pool or trampoline)
● You have a criminal record.
● The insurance company no longer provides coverage in your area.
There are steps homeowners can take to avoid these situations. For example, to avoid making excessive claims, you can take proactive steps to protect your home against damages, like replacing old plumbing or installing a modern security system.
Other potential issues, like having a low credit score or owning an aggressive pet breed, should be discussed before purchasing a policy to avoid potential problems. Many insurance companies are willing to take in these risks, making it a matter of looking for one that suits your needs.
Keep in mind that homeowners who rent out their homes need landlord insurance to cover their properties against potential damages. If your home is occupied by someone else and is damaged, your homeowners insurance claims will likely be denied.
What to Do If Your Homeowners Insurance Is Cancelled
If your policy is cancelled, it’s important to act as quickly as possible to resolve the situation and avoid a gap in coverage.
First, you should call your insurance company to learn why your policy is being cancelled and if there is anything you can do to avoid cancellation. If your policy is being cancelled due to missed payments, you may be able to maintain coverage simply by paying what you owe.
Similarly, if your policy is being cancelled due to factors that increase your risk, like failure to fix a broken roof, you may be able to avoid cancellation by having your roof replaced.
However, if your insurance company isn’t willing to work with you and is committed to cancelling your policy, you’ll need to start shopping for a new homeowners insurance policy.
When shopping for a new policy, it’s important to compare quotes from at least three different insurance companies to find the best rate available. Also, be sure to discuss any concerns you have with insurance agents before purchasing a policy. For example, if your previous policy was cancelled due to you owning a restricted dog breed, make sure your new insurance company is willing to take on that risk.
If you live in a high-risk state, like California or Florida, you might have trouble finding an affordable homeowners insurance policy. In these cases, you might consider getting coverage through your state Fair Access to Insurance Requirements (FAIR) program. These state-run programs provide coverage to homeowners that can’t get coverage through the private market.
Request a Home Insurance Quote
If you receive a cancellation or non-renewal notice from your homeowners insurance company, you need to take steps to resolve the situation and get coverage to protect your home.
Contact FIB insurance today to request a custom quote and learn more about homeowners insurance in Miami, FL.