Do you find yourself in a situation that your current insurance company has dropped your home policy? Many people are in this situation. It is important that you understand your rights.
A dropped homeowners' insurance policy, also called cancellation or nonrenewal coverage, can create a stressful situation. The situation can be stressful, but it does not have to. Four simple steps can help you get on track to get a new policy.
Your rights under a policy
You have the right to receive a written notice at least 30 days before your policy is cancelled or non-renewed. This gives you time to look for a new insurer and avoid paying a gap in coverage.
If your home insurance company does not provide a written notice to you, you can make a complaint at the state insurance regulator. The regulator will examine your complaint and determine if further action is needed.
Your insurance cancellation rights
After 60 days, insurers can cancel a homeowner policy if there is fraud or a failure to pay the premiums. A policy can be cancelled if an insurer determines that the customer's home poses a risk unacceptable, for example if there has been a fire or theft.
You can cancel your policy if you change the state of your property. As an example, insuring the home of a person who has had a house fire may cost more than insurance for a vacant vacation property.
Checking your credit score is also a smart idea before buying a homeowners' policy. Low credit scores can make it difficult to obtain a mortgage and may also be viewed as a greater risk by insurance companies.
It is possible to have your home policy canceled for having too many lapses. A lapse is a period of time during which you do not make premium payments, and insurance companies often have grace periods when they allow a lapsed policyholder to catch up on missed premiums and then have it reinstated.
A change in the level of risk for your home or multiple claims are also reasons why you may lose home insurance. Changes in the home's insurance risk can be caused by a large number of claims or dangerous neglect.
Your rights as a Policyholder
After a policy is cancelled, it can be hard to find insurance. This is especially true if you are in a poor credit rating or have other problems. You should speak to a professional financial advisor, who will help you select the best coverage for your situation and budget.
If you don't have an agent, there are many online brokers that can help you compare rates and options. These brokers are usually specialists in multiple insurance companies, and can help you determine which one is best for your particular risk profile.