Occasionally, home insurance companies fail to renew homeowners insurance policies, with properties located in high-risk areas being at the highest risk of losing coverage. Besides high risk, your insurer can also cancel your homeowners’ insurance policy if you file too many insurance claims. However, non-renewal of homeowners insurance does not mean you should let your property remain uninsured or underinsured.
Reason Why Your Insurer May Not Renew Your Policy
The following are a few reasons why your insurer might not renew your policy:
- You failed to renew your policy after it expired.
- Your insurers have changed their business policy and no longer provide home insurance coverage.
- You are involved in questionable actions, such as fraud.
- Your home has numerous maintenance issues like old and rusty plumbing systems with clogged pipes, faulty electrical systems, etc., which can be risky for your home.
- You have low credit scores. Insurance companies use credit scores to predict if you will file a claim within the next two years. Low credit scores indicate that you are more likely to file a claim, making you riskier for the insurer who may refuse to renew your policy.
- You continuously submit large or frequent claims.
If your homeowners’ insurance company drops you for one reason or another, you can take the following measures to protect your property.
- Contest the Home Insurance Non-Renewal
Sometimes, the insurance carrier may fail to renew your home insurance coverage without conducting a proper investigation. For example, your insurer may deem your home as high-risk based on the data obtained from the broad geographical area where your home is located. However, contrary to your insurer’s perception, your home may be located in a safer part of the high-risk zone. Besides, you can also have mitigating measures in place to protect your home from extreme weather-related events. For example, proper landscaping and a strong roof can help protect your house from hurricane damages. Such factors can help you get your coverage back if you can provide tangible evidence to your insurer against their non-renewal decision.
- Purchase Home Insurance Elsewhere
Switching insurers is a great way to find better rates, improved services, and better coverage. This means you shouldn’t be afraid to start over with another insurer in the event of homeowners insurance non-renewal. In case all insurers refuse to insure your home due to extreme risks, consider purchasing the Fair Access to Insurance Requirements (FAIR) from the government. Although it may not cover everything, it’s way better than being uninsured. Moreover, FAIR insurance is an excellent option to protect your home for a short period as you work on purchasing a better insurance policy.
- Move to Safer Grounds
In general, it is difficult for an insurance company to renew homeowners insurance policies in areas that are considered high-risk. This means that no matter how much you petition for a renewal, your insurance carrier won’t grant it, considering the high risks you’re still exposed to. If this is the case, relocating to safer zones may increase the possibility of getting your homeowners’ insurance coverage renewed.
- Repair Your Home
Typically, water damage is the leading reason for claims in the U.S., with the majority of cases being caused by leaking pipes, as reported by Forbes. Hence, it’s worth noting that the overall state of your home can contribute to too many claims, causing your insurer to drop you. For example, old pipes that are on the verge of bursting put your home at risk of water damage. Make sure to perform the required repairs and then inform your insurance carrier to renew your homeowners’ insurance coverage.
At the end of every policy term, you face a possible risk of homeowners insurance non-renewal, triggered by several reasons. In most cases, all you need is to resolve the underlying issue and convince your insurer to reinstate your homeowners’ policy. If that fails, you can switch insurers or purchase government-provided home insurance.
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