No system images/Getty Images
Important points
Your homeowner’s insurance company must give you 30 to 60 days’ written notice before your non-renewal becomes effective.
You can take steps to address the non-renewal by submitting evidence to your insurance company for reconsideration.
Non-renewal of home insurance can occur for a variety of reasons and is different from canceling a policy.
With extreme weather events on the rise and more insurance companies exiting high-risk markets, it’s not all that unusual to receive a home insurance non-renewal notice. In the non-renewal letter, the insurance company will tell you the reason for terminating your insurance policy. Your carrier may no longer have a policy in your state. Or it could be something unique to you as a homeowner, like late payments. If you cannot address the reasons for non-renewal, you may need to consider new insurance. Bankrate’s insurance editorial team can help you with how to get home insurance after non-renewal.
Why wasn’t my homeowners insurance renewed?
If the homeowner’s insurance company chooses not to renew the policy, it must provide written notice to the homeowner stating the reasons for the nonrenewal at least 30 to 60 days before the nonrenewal takes effect. Here are some of the most common reasons homeowners insurance companies choose not to renew a policy.
Your area is too risky
Insurance companies are private, for-profit companies. They are different from gas and electric companies, which are mandated by the state to serve a specific area. If it is no longer profitable for an insurance company to write insurance in a particular city or state, the insurance company can choose to stop writing policies for properties in those high-risk areas.
This typically occurs in states experiencing frequent and widespread losses. California has seen multiple insurance companies suspend new policies due to wildfire concerns and other issues, and Florida has been grappling with a home insurance crisis for years (the crisis is about to turn around). ). If insurance companies continue to pay out large amounts of claims, such as after a wildfire or hurricane, the bottom line could end up in the red.
risk profile too high
Your unique risk profile could be the reason you received a home insurance non-renewal notice. If your home insurance company deems you likely to make a claim, it may consider you a high-risk homeowner and terminate your coverage. Red flags for insurance companies include:
These days, home insurance companies use aerial photography to assess properties for damage and other risks not disclosed by homeowners. For example, if you installed a pool but didn’t let your home insurance company know, your insurance company may have used aerial photos to find out.
your house is empty
Many homeowners don’t realize that standard home insurance policies often include a vacancy clause. If your home is completely empty and unoccupied for more than 30 consecutive days (varies by state), your insurance company may cancel or choose not to renew your home insurance policy. If you treat your property as a vacation home, you must notify your insurance agent so they can insure your home with the appropriate insurance.
your house is not well maintained
In some cases, your insurance company may send a third-party property inspector to your home to conduct a visual inspection. Alternatively, instead of sending a home inspector, your home insurance company may use a drone to take aerial photos of your home. During these inspections, the inspector will check your home to make sure it is well-maintained and free of safety hazards, such as overgrown trees, debris on the property, or deterioration of the exterior. If it is determined that your home is not well maintained and could pose an increased risk of an insurance claim, the carrier may choose not to renew your policy.
How will my mortgage be affected if my home insurance is not renewed?
If you don’t renew, your homeowner’s insurance may lapse if you don’t purchase a new policy by the expiration date. If your coverage lapses, your mortgage company may force you to insure your home. Mandatory insurance generally does not provide as much financial protection to homeowners and is often more expensive than standard insurance. That cost is added to your mortgage payment. To eliminate or completely stop compulsory coverage, be sure to take out new coverage that takes effect before your coverage expires, even if you are still contesting the denial of renewal. When looking for new insurance, be sure to make sure your new coverage meets your lender’s insurance requirements.
How to receive compensation after non-renewal
Each state has different regulations on how insurance companies issue insurance non-renewal notices, but the average notice period before non-renewal begins is 45 days. From there, you have several options, depending on your reason for not updating:
- Address your concerns. If your home isn’t being maintained, it may be helpful to take action and fix the problem as soon as possible. Providing evidence to the insurance company that you have resolved the cause of the non-renewal may prompt the insurance company to reconsider the non-renewal notice. Addressing this issue as soon as possible may give you time to consider a new homeowners insurance policy in case your policy renewal is not approved after review.
- recover missed payments: If your policy is denied because your insurance company claims you missed a payment, contact a licensed agent to find out if it was a mistake on paper. If you recently changed home insurance companies, this may have happened.
- Question or dispute non-renewal. If you believe your reason for not renewing is unreasonable, you may be able to call your insurance company’s consumer affairs department or contact your state’s insurance department to question or dispute your claim.
- Start looking for new homeowners insurance. If your current policy lapses, you may no longer receive coverage and your premiums may increase in the future. Also, if you have a mortgage, one of the loan conditions may include continuing to carry home insurance. If you don’t confirm whether your home is covered, the lender may force you to carry insurance in your name, often at a higher cost.
- Consider an insurance broker: An insurance broker can help take the stress out of finding new insurance, especially if your state’s home insurance market is tight. You may want to contact an insurance broker in another area of your state. Your insurance broker may be familiar with smaller, local insurance companies that you may not know about.
- Check the date of your new policy. When purchasing a new home insurance policy, make sure the effective date is on or before the last day of your current coverage period to avoid accidental coverage lapses. Once you purchase your new policy and set an effective date, be sure to send a copy to your lender so they are aware of the changes.
- Consider a high-risk home insurance company. If your home is determined to be high risk, you may benefit from purchasing high risk home insurance. These insurance types can be more expensive than standard home insurance, but they can provide the coverage you need to avoid insurance gaps.
- Use your state’s FAIR plan. Some states offer FAIR plans (Fair Access to Insurance Requirements Plans). This government insurance program covers homes that are not eligible for coverage on the private insurance market.
