You may be in a position where your home insurer has dropped you. This is a common situation, and understanding your rights as a customer will help you to avoid it.
Dropped homeowners insurance, also known as nonrenewal or cancellation of coverage, can be a stressful situation. The situation can be stressful, but it does not have to. Here are four easy steps that will help you to get your life back on track.
Your rights as a policyholder
You have a right to receive an official written notice 30 days in advance of the cancellation or non renewal of your insurance policy. This gives you time to look for a new insurer and avoid paying a gap in coverage.
You can complain to the insurance regulator in your state if you don't receive a written notification from the insurance company. They will review your complaint and decide if they want to take further action.
Your insurance cancellation rights
The law allows insurers to cancel a homeowner's policy after 60 days from the date of purchase, if a customer fails to pay premiums or commits fraud. 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.
It's also a good idea to check your credit score before getting 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.
Your home insurance can be cancelled if there are too many gaps in your coverage. A lapse in coverage is a time period during which you have not paid your premiums. Insurance companies usually have grace periods where they will allow the policyholder to pay up for missed premiums.
The fact that you made multiple claims, or your home's new risk level are other reasons for dropping insurance. Your home's risk rating can be changed if you have made many claims or if your house has been dangerously neglected.
What are your rights as a policyholder?
You may find it difficult to obtain new insurance after your policy has expired, particularly if you have bad credit or any other issues. It is best to speak with a financial adviser who can guide you in finding coverage that suits your budget and needs.
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.