Your insurance company will inform you when your home insurance renewal process is coming up. However, there is also a chance that you will be informed that your policy will not be renewed. If your policy isn't renewed, this is not the end of the road. Here is a guide to help you make the best of the situation.
Normally the homeowners insurance renewal process is a good time to review your coverage and amend it. However, this time period could also bring change. Perhaps you have decided not to renew your coverage or your insurer has made the decision. The nonrenewal process is often stressful because people try to avoid situations where they will no longer be covered. Here is a guide to help you find a new homeowners insurance policy after going through the nonrenewal process.
Reasons Your Home Insurance Policy May Not Be Renewed
- Higher Risk
Your insurer may choose to drop your policy if they believe that insuring your home is much riskier than it was before. If you reside in an area that is prone to wildfires or natural disasters such as hurricanes or tornadoes, your insurer might consider it to be a suitable reason to drop your policy.
- The Insurance Company Is No Longer Offering Coverage
There is also a chance that your policy will not be renewed due to the insurance company pulling out of your state or cutting down on policies. Insurance companies will act in the best interests of their shareholders. In some cases, pulling out of states or regions allows insurance companies to maximize shareholder profits.
Be aware that most state laws mandate that insurance companies must inform policyholders about the nonrenewal decision at least two months in advance. The decision should also include a detailed explanation. You can file a complaint with the Department of Insurance if you believe that the process was handled unfairly.
- A Long Track Record of Claims
Arguably the most common reason that your home insurance will not be renewed is that your insurer believes that you have filed too many claims within the general three- to five-year period. Another possible reason is filing a claim that your insurance company disputes, such as water damage, theft, or an accidental fire.
- Finding Insurance after Being Nonrenewed
The most likely reason that your home insurance policy wasn't renewed is that your insurance company decided to stop serving the area. That doesn't have anything to do with you. It's also important to know that having your policy cut will not prevent you from finding coverage in the future. There is even a chance you may find a better rate. However, if your policy was cut because insuring your home has become too risky, you might have to go through a more complicated search for coverage.
The Insurance Marketplace
Research different coverage and rates on an insurance marketplace. You should be able to find a quote within minutes. Be sure to research traditional companies and those that offer special rates for higher-risk homes.
FAIR Plans
If you are having trouble finding a policy, inquire about a Fair Access to Insurance Requirements Plan. A FAIR plan is a high-risk policy offered through your state's Department of Insurance. The policy is funded by private companies. Generally, you'll have to provide documentation that you've been declined by multiple companies in order to qualify for a FAIR plan. Be aware that FAIR plans are very restrictive regarding the amount of coverage you'll have.
Before you start researching replacement insurance, contact your state's Department of Insurance to make sure that you were given enough time to find a new policy. If you have any questions regarding your home insurance coverage, the team here at Kneller Insurance Agency is here to assist you.
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