Day in, day out, there is an increase in the number of natural disasters recorded nationwide. Some of these disasters affect the home automatically and also have an impact on the homeowners insurance policy. If your homeowners insurance was dropped recently and you seek answers on what to do to protect your home and personal belongings, then you are in the right place.
There are tons of reasons why your insurance provider may drop your homeowners insurance, one of which is poor credit history and inability to meet your insurance payments.
Reasons Why Your Homeowners Insurance Policy May be Dropped
There are several reasons why your homeowners insurance policy may not be renewed or cancelled, such as:
- Poor Credit History: There are laws that allow insurance companies to discriminate based on bad credit. So, if your insurance company evaluates your credit history and realizes that you have bad credit, your policy may likely be dropped. Although it is still possible to get home insurance with bad credit, expect to pay higher premiums.
- Claim History: If you have filed multiple claims in the past few years, your insurance company may decide to drop and not renew your policy. This is because you are considered high-risk, and the possibility of you filing a claim regularly is also high.
- Location: Most insurance companies determine the continuity of your policy based on the area you stay in. For instance, if you live in an area that is prone to fire accidents or criminal activities, your insurer automatically considers you as high-risk and can drop your policy because of that.
- Roof issues: Also, if you have an older roof or any other old structures in your home, it may lead to your policy being dropped. If your roof is older than 20 years, most insurance companies may not be willing to reinstate your homeowners insurance policy.
- Hazardous environment: If the environment in which your home is situated is prone to hazards, such as fire or flood, your insurance company may refuse to renew your homeowners policy. But, if you are able to address those issues, your insurer may reinstate your policy.
How to Get Homeowners Insurance After Being Dropped
Finding out your homeowners insurance was cancelled can leave you in a dilemma, and you may be wondering how to get the policy back to protect your home against certain risks. We helped to curate ways through which you can get back this coverage:
• Contact your insurance provider
The first thing you need to do after your homeowners insurance policy is dropped is to reach out to your insurance company. You should request the reason why your policy was cancelled and if there are ways you can amend the situation. If your policy was cancelled due to late payment or non-renewal, you can ask for the appropriate solution for that.
• Shop for a new policy
If your insurance provider is not willing to activate your policy back, then you need to start looking around for a new policy immediately. You can get and compare quotes from more than three insurance companies in order to find an affordable policy that suits your budget and preference.
• Reduce your risk
Perhaps your homeowners insurance policy was cancelled as a result of high risks; there are ways to address them. If you reside in an area known for its population for windstorms or hurricanes, you can install stormproof windows to prevent damage. You should also consider replacing your roof and other structures that are old in your house.
• Consider a non-standard insurance policy
Insurance companies weigh certain factors before approving your application for homeowners insurance. If the situation at your home is considered high-risk, it may be difficult to get a standard homeowners insurance policy. Hence, we encourage homeowners to look into non-standard policies that are easier to get and have flexible eligibility requirements, such as FAIR plan insurance.
• Improve the condition of your home
As earlier said, there are several factors that determine the approval of a homeowner’s insurance policy. These factors also have an adverse effect on the cost of the premium you will be charged when purchasing this policy. If the condition is fair, good, or excellent, it would increase your chances of getting homeowner’s insurance from another insurance company.
FAQs
Will I be notified before my insurance is dropped?
Yes, before your homeowner’s policy is cancelled, your insurance company will send a notification of cancellation or non-renewal via email or other channels.
The period between the date of the notification and the actual cancellation day depends on the laws of the state you reside in; it could take 30 to 120 days.
Is it difficult to obtain homeowners insurance after being dropped?
The answer to this question depends on the situation surrounding the cancellation and the area in which you reside. But usually, it is challenging and difficult to get home insurance if your insurer drops or cancels your policy.
You can start by exploring alternatives that are available for you; this can be done through shopping around and comparing quotes from different insurers. If you are still unable to get homeowners insurance, you can seek coverage from FIAR plan insurance.
