Have you been told that your current insurer will no longer provide home insurance? It's common for people to find themselves in a similar situation.
It can be stressful to lose homeowners insurance. This is also called nonrenewal, cancellation or termination of coverage. This can be a very stressful situation, but you don't have too. Four steps will help you get your new homeowners' policy and back on track.
What are your rights as a policyholder?
You can receive a notice in writing at least thirty days before the policy is canceled or not renewed. This allows you enough time to find another insurer and avoid having to pay for a gap in your 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. Your complaint will then be reviewed by the regulator, who will decide what further action to take.
Your insurance cancellation rights
Insurers can cancel a homeowners policy 60 days after the date of purchase if they fail to pay premiums. An insurer may also cancel a homeowners policy if their property is deemed to be a high-risk item, like if it's been damaged in a fire or stolen.
A change in the condition or value of the property is another reason to drop a policy. 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.
A homeowners policy is not complete without checking your credit report. A low credit score can make it harder to get a mortgage, and insurance companies may see you as a higher risk.
You can also get your home insurance canceled if you have too many lapses in coverage. A lapse occurs when you don't pay your premiums for a certain period of time. Many insurance companies offer grace periods to allow policyholders who have fallen behind on their payments to get caught up.
Other reasons for dropped home insurance include a change in your home's risk level or the fact that you have made several claims. A change in your home's risk level can occur if there have been a lot of claims on your home or if the home has become dangerously neglected.
Your rights as a Policyholder
It can be difficult to get insurance after a policy has been dropped, especially if you have a bad credit score or other issues. A financial advisor can help you choose coverage that meets your needs while staying within your budget.
Online brokers can assist you in comparing rates and options if you don't already have one. Many brokers specialize in different home insurance companies. This allows them to better assess which company is the best fit for you.