What to do after your home policy is cancelled or nonrenewed

After your homeowners insurance is cancelled or nonrenewed, you can shop around and try to get a policy with a different insurer. If your policy was cancelled or nonrenewed because the company is no longer offering coverage in your area, purchasing a new policy with a different insurer shouldn't be difficult.

If your insurer nonrenewed or cancelled your policy because your house needs repairs or you filed too many claims, you may have difficulty finding an insurance company willing to insure your home. If you're unable to get a policy through the standard market, you may be able to obtain coverage through your state's FAIR (Fair Access to Insurance Requirements) plan. A FAIR plan is a state-run program designed to provide home insurance to homeowners that may be too risky for standard home insurance companies. Most states offer FAIR plans, or a state mandated insurance program, but coverage limits may be lower than what you'll find with private home insurers. Contact your state's insurance commissioner for more information.

Is there a difference between a cancellation and a nonrenewal of home insurance?

Whether your homeowners insurance is cancelled or not renewed, the result is the same: your insurance policy is being discontinued. But the rules for each are a bit different. Nonrenewal occurs at the end of the term when the policy is expiring and may occur for multiple reasons. An insurance company generally may cancel your policy within a certain number of days after the inception of your policy for any reason. After that, they're typically only able to cancel the policy for limited reasons, such as the following:

  • Nonpayment
  • Material misrepresentation or fraud occurs
  • A substantial change in risk happens

However, the specific reasons for cancellation may vary by state and insurer.

What are my home insurance cancellation rights?

Your insurance company is typically required to provide a certain number of days notice before discontinuing your coverage. The exact amount of time may vary by state and by the reason for cancellation.

Some states also require insurers to tell you why they're not continuing your policy. If your state doesn't require the insurer to explain, contact your insurer to find out why you were cancelled or nonrenewed. If you don't agree with the decision, you may file a complaint with the insurance administration in your state.

Generally, your insurer must give you a certain number of days' notice before discontinuing your coverage. The exact amount of time may vary by state and by the reason for cancellation.

Common scenarios for nonrenewal of home insurance

When and why insurers are able to nonrenew a homeowners insurance policy are typically regulated by the Department of Insurance or a similar agency in your state. Here are several reasons your insurance company might not renew your coverage:

Liability hazards are found during an inspection

If your homeowners insurance was cancelled after an inspection, it could be because the risk of insuring your property changed since you purchased your policy. This might occur for a variety of reasons, such as:

  • An aging roof or HVAC system
  • Renovations compromised the integrity of the structure
  • You haven't properly maintained your home
  • You added features that your insurance company can't insure, such as a trampoline or pool

Claims history

While insurance is meant to be a safety net to help protect against the unexpected, filing too many claims may cause your insurance company to discontinue your coverage based on your claims history.

A drop in your insurance credit score

A drop in your score may be a signal to some insurers that you're more likely to file a claim. If you live in a state that allows the use of credit-based insurance scores in underwriting decisions, the company may not renew your policy if your score has dropped significantly.

New pet

If you get a pet, it's important to let your insurer know, as there are some animals that aren't eligible for coverage from your homeowners insurance company. Depending on the pet you've added to your household, your insurer might add a clause that excludes your pet from coverage or nonrenew your policy.

The insurance company no longer operates in your area

Sometimes a nonrenewal may be the result of a business decision. It's not uncommon for insurers to stop insuring homes in areas where the crime rate or risk of natural disaster has increased.

What if I don't find a new policy after getting cancelled or nonrenewed?

While home insurance isn't mandated by law, if you have a mortgage, your lender will require you to carry a home insurance policy. If you don't find a new policy on your own, they'll find one for you. This is known as force-placed insurance or lender-placed insurance. These policies typically provide less coverage and often cost more than a standard homeowners insurance policy.

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