How to get homeowners insurance after nonrenewal
Your insurance company will send you a notice a few months before the expiration date of your homeowners insurance policy. In most cases, it's a renewal offer to keep the policy, but it could also be a nonrenewal notice.
If you receive a nonrenewal notice, your carrier will explain why it is not renewing your policy. It is sometimes an issue that can be addressed and submitted to your carrier for consideration when renewing your policy. In other cases, receiving a nonrenewal notice means you'll need to start looking for a new homeowners insurance carrier in order to avoid a lapse in coverage.
Why was my homeowners insurance not renewed?
When a homeowner's insurance company decides not to renew a policy, they must send a written notice to the homeowner explaining why. The following are some of the most common reasons why a homeowners insurance company may decide not to renew a policy:
Your area may be designated as too high-risk
An insurance company may decide not to sell coverage in your area or may decide to reduce the number of policyholders. For example, a carrier may decide to reduce its liability after experiencing high losses in a specific zone, such as during the recent California wildfires. The California Insurance Commissioner issued a one-year moratorium prohibiting insurance companies from canceling over one million home insurance policies in the most severely damaged wildfire disaster areas.
Your history may affect renewal
If you filed multiple or expensive homeowners insurance claims, your carrier may deem you too risky to insure. Making too many late payments is another reason a carrier may decide not to renew your coverage for another year. Although it may appear to be an unfair practice, a carrier may choose not to renew your coverage after your policy expires for a variety of reasons.
Your home is vacant
Many homeowners are unaware that standard home insurance policies frequently include a vacancy clause. If the house is empty and unoccupied for 30 days or more (depending on the state), the insurance company may choose to cancel or not renew the policy. If you intend to use this property as a vacation home instead, you should notify your insurance agent so that the home can be insured with the appropriate policy.
Your home’s condition is not well-maintained
An insurance company may send a third-party property inspector to your home on occasion to conduct an exterior inspection. The inspector inspects your home during these surveys to ensure that it is well-maintained and that there are no safety hazards, such as overgrown trees, debris on the property, or deteriorated exterior.
The insurance company may discontinue underwriting
On rare occasions, an insurance company may decide to stop doing business in your area or sell the type of homeowners insurance you purchased. When this occurs, the carrier will notify you of the nonrenewal so that you can find another insurance company. This is a common issue in Florida's homeowners insurance crisis, where many carriers have chosen to leave the state voluntarily, limit policy eligibility requirements, or liquidate completely.
How to get coverage after nonrenewal
Each state has its own rules regarding how a carrier can issue an insurance nonrenewal notice, but the average time of notice before the nonrenewal begins is 45 days. You have a few options from there, depending on the reason for nonrenewal:
- Address the issue. If your home has been neglected, it may be beneficial to take action and resolve the issues as soon as possible. Even if you shop around without addressing the issues, it's possible that a new carrier will decline coverage for the same reason. Once completed, return the photographs to the insurance company, who will reconsider the nonrenewal notice. Taking care of this as soon as possible may allow you to shop around for a new homeowners insurance policy in the event that the policy is not approved for renewal after reconsideration.
- Question or dispute the nonrenewal. If you believe the reason for nonrenewal is unfair, you may be able to question or dispute it by contacting the insurance provider's consumer affairs division or your state's insurance department.
- Shop around for a new homeowners insurance policy. Allowing your current policy to lapse may leave you without coverage and expose you to risk if something happens while you are uninsured. Furthermore, if you have a mortgage, one of the loan conditions is likely to be to maintain continuous home insurance. If you do not ensure that the home is covered, your lender may purchase a new policy in your name, which is often more expensive.
- Check the date of your new policy. To avoid an accidental lapse in coverage, make sure the effective date of your new home insurance begins on the last day of your current coverage, or the day before. After you purchase the new policy and set the effective date, send a copy to your lender to inform them of the changes. If you choose an earlier effective date, make sure to notify your current insurer so that you do not have duplicate coverage.
Depending on why you did not renew, getting new home insurance may be simple or difficult. If you were denied because of your claims or payment history, or because you live in a high-risk area, finding new coverage may be more difficult. Many states offer Fair Access to Insurance Requirements (FAIR) Plans, also known as shared market coverage, to assist individuals who are having difficulty finding affordable homeowners insurance.