Your current home insurance provider has cancelled your policy. Many people find themselves facing this dilemma, so it is important to know your rights.
Dropped homeowners insurance, also known as nonrenewal or cancellation of coverage, can be a stressful situation. It's a real pain to deal with, but it doesn't have to be. Four simple steps can help you get on track to get a new policy.
Your rights under a policy
You are entitled to receive written notification at least 30 calendar days prior to the cancellation or non-renewal of your policy. This gives you time to look for a new insurer and avoid paying a gap in coverage.
If the home insurance company doesn't provide you with a written notice, you can file a complaint with your state's insurance regulator. They will review your complaint and decide if they want to take further action.
Your insurance cancellation rights
After 60 days, insurers can cancel a homeowner policy if there is fraud or a failure to pay the premiums. The insurer can also cancel a policy after determining that the customer's property presents an unacceptable risk, such as if it has been damaged by fire or theft.
Another reason for dropping a policy is if the condition of the property changes. Insuring a house that has suffered damage from a fire is more expensive than insuring a vacant vacation home.
Before purchasing homeowners insurance, it's a good idea also to check your score. If you have a low credit score, it can be difficult to get a loan and insurance companies might view you as more of a risk.
You can also get your home insurance canceled if you have too many lapses in 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.
A change in the level of risk for your home or multiple claims are also reasons why you may lose home insurance. If your home has been neglected or there haven't been many claims, the risk level of your home can change.
Your rights as an insurance 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. It is best to speak with a financial adviser who can guide you in finding coverage that suits your budget and needs.
Online brokers can assist you in comparing rates and options if you don't already have one. They typically specialize in multiple home insurance companies and will be able to give you a better sense of which ones are a good fit for your risk profile.