Homeowners sometimes forget that getting homeowners insurance is a two-way street: you have to agree to go with the company, and they have to agree to insure you. Even if an insurance carrier has previously agreed to insure you, they can end that agreement just as you can end it. This can be shocking to homeowners who receive a letter from their insurance provider that they have either canceled their policy or chosen not to renew it. While the insurance provider typically must give notice, homeowners can still feel unsure about how to proceed. Here are some tips about what to do when receiving notice of cancellation as well as some common reasons why insurance gets canceled.
What To Do When Finding Out About Homeowners’ Insurance Cancellation
The worst thing to do when finding out about cancellation is to do nothing. Here are three steps homeowners can take to ensure their property remains protected in the event of a cancellation.
- Call and Inquire About Why the Cancellation Happened
Contact the insurance carrier and ask why the cancellation has occurred. Insurance providers are required to provide a reason for why the policy will no longer be renewed. In the event that they do not, continue to push for a reason. Otherwise, you may want to contact an insurance attorney to discuss your options.
When an insurance company provides its reasons, there is a chance that you can retain coverage. For instance, there may be canceled coverage due to some aspect or condition of the property. If the homeowner can correct or remove that concern, the insurance provider may be satisfied to keep the policy. Alternatively, the insurance provider might agree to provide coverage in exchange for a higher monthly payment.
- Act Fast
Whatever a homeowner ultimately does—stay with the old company or pursue a policy with another insurance company—must be done quickly. While the old insurance company must give notice, that notice is typically for a short amount of time. Homeowners need to ensure that they have different coverage because, if there is a gap and coverage and there is damage, the homeowner would have to pay. Many mortgage providers require there to be continuous insurance coverage, meaning that there cannot be gaps. To protect their investment, mortgage companies will typically purchase insurance—that is highly expensive—and the homeowner will be forced to pay the bill.
- Look Into Other Companies
If an insurance provider sends you a notice of cancellation—even if you had previously been highly satisfied with the company—it may be time to consider your options elsewhere. See if other companies are willing to extend coverage and ask what the quote would be. This new provider may be able to provide coverage for a lower rate. Additionally, a homeowner can use that quote as leverage with the old company to remain covered at a cost savings.
Common Reasons Homeowners’ Insurance is Cancelled
Insurance policies will specify the legitimate reasons that they can cancel coverage—and those reasons can be numerous. However, here are the most common reasons that an insurance company can cancel or deny coverage.
Whenever a homeowner has a pet, it is important to review the terms of the policy to see what it covers. Some insurance policies will exclude pet coverage altogether. Homeowners with pets would then need to get coverage with a different company or purchase pet insurance separately.
Even if the homeowner’s insurance policy covers animals, it may only cover certain ones. Many insurance policies have breed restrictions, meaning they do not cover breeds that they determine are more likely to bite. Some of these breeds include Pit Bull Terriers and Rottweilers. Additionally, the policy may only cover a certain number of animals.
Certain features of a home are more likely to result in injury. For instance, there are many accidents each year resulting from trampolines and pool diving boards. Because these features have a higher likelihood of resulting in accidents, they are more likely to result in the homeowner filing an insurance claim. This means that the insurance company assumes a greater risk when it insures them, as it could end up paying a considerable amount of money to settle a claim. As a result, the insurance company may consider them hazards and refuse to cover them.
Filing too Many Claims
While insurance is there to file claims when damage arises, filing too many claims can cause the insurance company to decide that coverage is just no longer worth it. Although insurance companies can offset the claims by raising premiums, they may just decide that insuring the homeowner is not worth the risk anymore.
Failure to Maintain Property
An insurance company, when it agrees to insure the property, is promising to pay out claims arising from the property as it was when the agreement was reached. If a homeowner stops maintaining the property, it opens the home up to greater and more extensive claims, as a home that is not well-maintained is more vulnerable to damage. Insurance companies that become aware of this failure to maintain may decide not to renew the policy. Even if the insurance company is not aware of the lack of upkeep, failure to maintain can impact how much a homeowner will get from a claim, as they have a duty to maintain the property.
Insurance Company Left the State
In Florida, it is common for insurance providers to leave the state. Earlier in 2022, United Property & Casualty Insurance Company, which was one of the largest home insurers in Florida, left the state. This left many Florida homeowners scrambling to find new coverage. Florida is a high-risk state, with many claims resulting from natural disasters. There are also a fair number of fraudulent claims. Once those insurance providers leave the state, Florida homeowners are restricted to obtaining coverage from the other providers who remain in Florida. This problem is only anticipated to get worse for Florida homeowners seeking coverage.
Was Your Insurance Canceled? Speak to a Skilled Homeowners’ Insurance Attorney Now
Have you been canceled or do you think you’re about to lose your homeowner’s insurance? Contact our office today to speak with one of our well-versed homeowners’ insurance attorneys immediately.