What To Do if Your Homeowners Insurance is Canceled – Home insurance is an important tool to protect your home. These policies are made to help you financially in cases of fire, theft, and other costly scenarios. Finding out that your home insurance policy has been non-renewed or canceled may leave you very weak.
In this case, you might not even know what to do or the next step to take. In this article, we will explain what To do if your Homeowners Insurance is Canceled.
Reasons Why Your Homeowners Insurance may get Canceled
There are various types of homeowner’s insurance terminations. While some have very simple solutions, others mean you will have to find a new insurer to avoid a lapse in coverage. These cancellations also apply to renters and condo insurance as well. Below are some of the most common reasons your coverage may be disrupted.
Lapses in Coverage
Not making payments towards your premium can cause homeowners insurance cancellations. But the lapse in insurance may be the easiest type to fix. Most insurers offer a period in which you can make payments and continue your coverage. Making payment for your overdue bill as soon as possible is the easiest way to resolve a lapse in coverage. As long as it is within the grace period given by the insurer.
If your mortgage company pays the insurer from an escrow account, you may have to contact the lender to know why it did not send payment. It may be that the lender did not get a bill if the mortgage clause listed on your policy was outdated or incorrect.
Non-renewal of Coverage
Nonrenewal is the most popular type of cancellation. It means that your policy will not be available again at the end of the current term. It can be initiated by you or the insurer. The insurer may decide not to renew your policy for many reasons, which may be initiated by you or the insurer. such as the condition of your home or a change in your claim history. If you no longer fit into the company’s underwriting profile for various reasons, your policy may be non-renewed.
Regardless of the reason, state law requires them to let you know in writing if they decide to nonrenewal your insurance at the end of the existing policy term. And also explain the reason. When issuing a non-renewal, the insurance company is required to provide the policyholder with an advance written notice ranging from 30 to 120 days.
This depends on the state. To give you enough time to look around and find a good alternative, you may not be charged a high premium when moving to another insurance company because of a non-renewal. However, this depends on the reasons that led to your provider’s decision.
You may also decide to initiate the non-renewal if you have requested quotes from various companies. And decide to switch providers at the end of your renewal date. In this case, you will have to let your previous insurer know to non-renew your policy. So that you won’t end up with two policies while switching carriers.
Cancellation of Coverage
Just like non-renewals, you or the carrier may initiate a cancellation. Cancellation is different from nonrenewal because the last day of coverage does not coincide with the policy’s renewal date. For instance, if your policy starts and ends on May 1 each year, a renewal notice will not be effective until the end of the policy term. Meanwhile, a cancellation notice can stop the policy anywhere within the term with a notice required by state law.
Insurance providers may cancel your policy for various reasons. For instance, if you omitted information or misrepresented yourself during the application process, the coverage may even be canceled even if you just purchased the policy and home. The cancellation may also be related to inspections, fraud, or the fact that the company is insolvent.
Insurers are required by state laws to send in a written notice of cancellation. Some are usually within 30 days, while others may require 60 days. This will give you enough time to discuss the cancellation with the provider. And correct any problems so that the insurer will continue the coverage or you can find a new home insurer.
A policyholder may also initiate a cancellation. For example, if you sold your home or found a very cheap company, you can contact your carrier or agent and ask that your policy be canceled on a fixed date. You will need to sign a form to confirm this request. You may also be entitled to a refund if you paid the premium in advance for the policy term.
What to do if Your Homeowners Insurance is Canceled
Depending on the notice you get, you may either find new coverage or take steps to find solutions. Here is what you can do for each type of notice:
A notice of non-payment
If your insurance is paid via your escrow account, you will get a notice of nonpayment. It is advisable to contact your lender immediately. There may be a larger issue or a simple clerical error that you need to remedy with your lender directly.
Notice of a Lapse in Coverage
If you get a policy lapse notice, you should call your agent or carrier instantly and make past-due payments. Once your policy is back, you may need to notify your lender to avoid a forced-place policy. This is a policy purchase by your lender that you will be required to pay. It will be much more expensive than purchasing a policy on your own. And it may not even offer the same coverage as the previous policy.
A notice of non-renewal
If you get a non-renewal notice, you will need to first find out why your policy is being terminated. The notice you get may include the reasons, or you could contact the provider or agent for more clarification. Depending on this situation, you may be able to keep your coverage or make changes to your policy or home that will satisfy the insurer.
Notice of Cancellation
If you get a cancellation notice, speaking to your insurer is the best step to take. If the policy was canceled after your home inspection, you might be able to make changes to your home. This may be enough for the insurer to take back the cancellation and continue your coverage. Sometimes insurance providers will offer a time frame for making repairs before the cancellation.
If you are not able to find solutions or convince your insurer to keep the policy, you may have found insurance in another place.
Can I still get Homeowners Insurance after being dropped off by my Carrier?
Although it may be very hard, it is not impossible to find coverage after a non-renewal or cancellation. Especially if your home is in poor condition or you have many claims. If you find it difficult to find cheap home insurance after the cancellation, you should check around for carriers providing coverage for high-risk homeowners in your state.
Or if your policy was canceled after an inspection, address the policy immediately, which may help get it back to you. If the cancellation was because of an insurance fraud, you may find it hard to get replacement coverage.