The homeowners insurance policy was never meant to be a home maintenance policy. The coverage is designed for sudden and unexpected large losses. In this current marketplace, homeowners need to be especially careful about filing a number of small claims over a short period of time. Most carriers have tightened their restrictions on the number of claims you can file before you are considered a higher risk customer or too high a risk, which could result in your homeowners policy being non-renewed.
Of course, the decision to file a claim for damage or a loss that is covered under your policy is ultimately up to you, but when it comes to repairing minor damage you may want to consider whether it's something you want to pay for out-of-pocket. Most people pay for minor car repairs all the time your home isn't really any different.
Homeowners Insurance Tips
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Consider carrying a higher deductible. This will save you money on your premium and discourage you from filing small, petty claims that put you at greater risk for non-renewal.
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Do routine home maintenance check ups. Preventing damage from water losses and other typical in-home disasters that can often be avoided may save you from future headaches and financial risk.
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Learn your home's claims history. If you are buying an existing home, find out what claims have been filed in recent years. Water loss claims, for example, can impact whether the property is considered higher risk. The Comprehensive Loss Underwriting Exchange (CLUE) database, created by ChoicePoint Inc. in Georgia contains 90-96% of all homeowner claims nationwide, and reports are available online at www.choicetrust.com for a small fee.
If Your Homeowners Policy is Non-Renewed
There is a big difference between cancellation and non-renewal. Insurance companies cannot cancel a policy that has been in force for more than 60 days except:
- If you fail to pay the premium.
- If you have committed fraud or made serious misrepresentations on your application.
Non-renewal is a different matter. Either you or your insurance company can decide not to renew the policy when it expires. Depending on the state you live in, your insurance company must give you a certain number of days notice and explain the reason for non-renewal before it drops your policy. If you think the reason is unfair or want a further explanation, call the insurance company's consumer affairs division or the state department of insurance.
A policy could be non-renewed for a variety of reasons—from a company deciding to discontinue that line of insurance to a property no longer meeting an insurer's underwriting guidelines—so you shouldn't necessarily think the non-renewal is because of something you did. On the other hand, if you did do something that raised the insurance company's risk considerably, like committing fraud, your policy may not be renewed.
If your insurance company did not renew your policy, you will not necessarily be charged a higher premium at another insurance company. Click on the following links to sites that offer insurance company ratings.
Trouble Getting Coverage
If one or two insurers turn you down, don't despair. You do have other options. If you are buying a new home, ask the real estate agent, mortgage lender or builder for names of companies that write in your area. If it's an existing home, find out from the previous owners who insured the house. If you still can't find coverage, consider the following:
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Ask for help from your current insurance professional.
Talk to the agent or company representative that previously insured your home or is currently insuring your car, boat or business. If the problem is not where the house is located, but the condition that it is in, find out what type of improvements or disaster-resistant features would be needed to make your home more insurable. The Insurance Institute for Business & Home Safety (IBHS) also provides information on natural hazards, community land use and ways you can protect your property from damage.
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Talk to your neighbors and find out which insurers they use.
Get the names of any agents who may be knowledgeable about the specific risks in your neighborhood.
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Call your state insurance department.
It can generally provide you with a list of insurers that write in your area, including higher risk insurance companies. It might also have information regarding community groups that help homeowners with insurance problems.
FAQs
Non-renewal is when you or the insurance company decides not to renew the policy when it expires. Insurers typically must give you at least 30 to 60 days' notice if they decide not to renew your policy.
What does non-renewal mean in home insurance? ›
Non-renewal is when you or the insurance company decides not to renew the policy when it expires. Insurers typically must give you at least 30 to 60 days' notice if they decide not to renew your policy.
For which of the following reasons may an insurer refuse to renew a property insurance policy after it has been in effect for more than 60 days? ›
After your policy has been in effect for 60 days it may not be cancelled or non-renewed for a three-year period, except generally for the following reasons: nonpayment of premium (however, if payment is received by the company within 15 days of the mailing of the cancellation notice the policy will not be cancelled); ...
Why would an insurance company refuse to renew? ›
This can happen if you break the terms of your policy, like by submitting a fraudulent claim. Other insurers can ask if you've ever had a policy cancelled and depending on the reason behind this, can refuse to offer you future cover.
How do I stop my home insurance from going up? ›
Increase your deductible
A quick way to reduce your premium is to raise your homeowners insurance deductible, the amount you pay if you have to make a claim. If you have a $1,000 deductible, you could save an average of nearly 13% a year by increasing it to $2,500, according to NerdWallet's rate analysis.
What is a conditional non renewal? ›
The conditionally renewable provision in an insurance policy allows an insurance company to cancel immediately, not renew at the renewal date, or increase premiums on a policyholder under certain conditions. This provision benefits the insurer, not the policyholder.
What is a non renewal rescission? ›
rescission - when the company voids your policy back to the beginning. There is no coverage at all and the company will return the money you paid; cancellation - when the company terminates your policy before the expiration date; and. nonrenewal - when the company terminates your policy at the expiration date.
Is it hard to get homeowners insurance after being dropped? ›
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.
Is it bad to switch home insurance companies often? ›
A different insurer may offer you better rates for your coverage needs. Is it bad to switch homeowners insurance? No, in fact it's a good idea to compare homeowners insurance quotes annually to make sure you aren't missing out on a better deal elsewhere.
What is a decision by an insurance company not to renew a policy? ›
Non-renewal occurs when the insurance company decides not to continue the coverage when the policy expires. Here are common reasons for non-renewal: Your insurance company decides to cease business in your state or sell fewer policies.
While a non-renewal is often a proactive business decision by the insurer, a cancellation is usually a result of policy violations or non-compliance by the policyholder.
Why am I being denied for home insurance? ›
Living in a high-risk location, having hazardous home features, home maintenance issues, your home's history of insurance claims, and more can be reasons an insurance company may determine a house to be uninsurable.
Which renewal option does not guarantee renewal and allows the insurance company to refuse renewal? ›
A conditionally renewable policy provision allows you to renew your policy and continue coverage – but with conditions. The insurer can refuse to renew the policy or raise rates under certain conditions spelled out in the contract.
Is it normal for home insurance to increase every year? ›
As inflation increases, insurance companies respond by raising rates. That's because the cost of items in your home will cost more than they did last year. As the price for appliances and equipment escalates, rates will adjust as well.
What is one way to lower your premiums on your home insurance? ›
Raise your deductible: The higher your deductible, the lower your premium. But be careful: You shouldn't choose a deductible higher than you can afford to pay out of pocket for the sake of having a lower monthly payment. You want to be sure that you have the right amount of protection if the worst does happen.
Who has the cheapest homeowners insurance? ›
State Farm is the cheapest home insurance provider in 22% of states and Allstate is the cheapest provider in 18% of states. Oklahoma has the most expensive home insurance with policies averaging $6,325 per year, while Hawaii offers the lowest average annual premium at $782.
What is a non-renewal in insurance? ›
Non-renewal occurs when the insurance company decides not to continue the coverage when the policy expires. Here are common reasons for non-renewal: Your insurance company decides to cease business in your state or sell fewer policies. Late car insurance payments.
Is not renewing insurance the same as Cancelling? ›
While a non-renewal is often a proactive business decision by the insurer, a cancellation is usually a result of policy violations or non-compliance by the policyholder.
Is non renewal the same as termination? ›
Districts often inquire about the difference between nonrenewal and termination of a contract. Contract nonrenewal can only occur at the conclusion of the last year of a term contract. A good cause termination occurs mid-contract.
What is the meaning of non renewal? ›
“Nonrenewal” means that your insurance company will no longer insure your home once your policy expires. In most states, your insurance company can only cancel your coverage in the first 60 days or if: You fail to pay the premium.
