What Should You Do If Your Home Insurance Is Canceled?
Why Would an Insurance Company Cancel Your Home Insurance Policy?
A canceled insurance policy is when the provider halts an existing policy before the term expires. Usually, an insurance company cancels a policy when there is a default in the terms of the agreement. Here are a few things that can trigger a cancellation of your policy if you’ve had it for more than two months.
- Failure to pay your premium or suspected fraud activities
- Making a habit of filing too many claims
- Bad or low credit score
- Aggressive pet breeds that are likely to harm visitors
- A new trampoline or pool – certain installations can significantly increase the risk of a home
- If the insured property is vacant
- If the homeowner gets a criminal record
- If the coverage is no longer available in your community
Here are some helpful steps to take if your homeowners insurance is canceled. If your policy is canceled because of too many claims, you can take certain measures to better protect your home and reduce the chances of loss. Replacing old pipes or installing a fire alarm system can make a big difference in risk level. Setting up a security system that alerts you when there is an unauthorized entry into your home can also reduce the chances of loss by theft. The lower the risks, the fewer your claims, and the less likely you’ll be to face cancellation.
Other factors like bad credit score, dangerous pets, and installations like pools and trampolines depend on your provider. To avoid cancellation, it is best to choose a provider that is willing to take these types of risks. Most insurance companies prefer properties that have minimal risks, but some are willing to take on the challenge of a high-risk home. However, this calls for a significantly higher premium rate.
The Difference Between Being Canceled vs. Non-Renewed
A non-renewal means that your provider reviewed your policy with the intent to renew, but found that your property no longer meets its requirements. Each company has specific requirements and guidelines. Some things considered uninsurable for one company may not be for another.
Hazardous installations, aggressive pets, and bad credit are some of the factors that can cause insurance companies to decide not to renew your policy. Your provider is obligated to give you notice before deciding on a cancellation or non-renewal of a policy. Usually, there must be a notice of up to 20 days for cancellation and 45 days for non-renewal. This is to give the homeowner enough time to secure a new coverage policy.
If your provider fails to inform you about the cancellation or non-renewal, your policy will remain in place until 45 days after the notice is sent. If the reason for cancellation is because of failure to meet the specific requirements of your provider, you will have several other options to reinstate your policy or find a new insurer.
What to Do After a Home Insurance Cancellation
The moment you get a cancellation or non-renewal notice, the first step is to contact your provider to confirm the information. If you act fast, there is a high chance that something can be done to keep the policy in place. For example, if you are canceled because you missed a month’s payment, you may simply need to pay your premium. If the policy isn’t renewed because the property is vacant, you may be able to get a landlord policy as a replacement.
In many cases, your provider allows you to look for a solution before the cancelation date. If a damaged fixture is the reason for non-renewal, repair or replacement can get you back on track. If your provider is hesitant to offer solutions to remedy the situation, you can check the market for other coverage options. It is best to look for a company willing to take on more risks. For example, some companies may allow you to keep pets that are restricted by other insurance companies.
To learn more about how much homeowners insurance you need, contact the experts at Club Agency Insurance Brokerage in Garden City, New York today. We are here to assist you with all your coverage needs.