An insurance company can cancel your homeowners insurance policy for a variety of different reasons. In fact, it is quite common for companies to cancel or refuse to renew policies and it often leaves homeowners shopping around for coverage that is necessary to carry.
Having homeowners insurance is not a negotiable for many people (especially because a condition of have a mortgage is that you maintain insurance on your home), therefore it is important to understand why it can be canceled or up for non-renewal.
Homeowners Insurance Cancellation vs Non-Renewal
While many people use the term cancellation for both cancellation and non-renewal of a homeowners insurance policy, they are indeed very different. Cancellation is when the policy is stopped following notification of the policyholder. A policy that has been in effect for more than 60 days can not be canceled unless you are not paying your premiums or you have committed fraud in the information you gave the insurance company.
Non-renewal of a policy is an entirely different story. It is when a company has decided to not offer you another policy when your current one is up for renewal. It can happen for a variety of reasons from insurance policy changes to too many claims on your part to failure to meet certain guidelines the company wants met. With non-renewal, you typically have more time to shop around and find alternate coverage.
Reasons for Homeowners Insurance Cancellations and Non-Renewals
There are many reasons that homeowners insurance may be canceled or not renewed. In some situations, it is completely preventable by the homeowner. However, in many other situations, it is completely out of the hands of those who own the house.
Some of the preventable reasons for homeowners insurance cancellations and non-renewals include:
Some of the reasons for cancellation of homeowners insurance (in Florida you must be given 120 days notice) that are unpreventable include:
What to do When Your Homeowners Insurance is Being Canceled or Not Renewed
If you happen to be faced with your homeowners insurance being canceled or not renewed, you will be given some notice. How much will depend on whether or not you are being canceled for just cause like non-payment of your premiums or whether you are simply not being renewed at the anniversary date of your policy. Whatever the cause, you will need to start shopping around for a new policy and comparing quotes from other companies, especially if you have an existing loan on the property. The bank will require you to carry homeowners insurance to protect his investment as long as you owe money on the home.
Following cancellation for just cause, you will typically find it more difficult to find homeowners insurance. It will not be impossible, but it will likely be much more costly than before. Your insurance record will follow you and potential new insurers will know the reason for your cancellation, making you a higher risk for them.
If you are facing non-renewal, you may or may not have difficulty finding new coverage. If the non-renewal is because of a change in the company’s policies, you will likely be able to easily find competitive pricing from one of the many other insurance companies on the market. However, if your policy is non-renewable because of something you did or neglected to do, you will find higher rates and more problems finding companies to cover you in your future.
Compare Home Insurance Rates from Top Companies
When cancelled or non-renewed, the reason for that action must be taken into consideration when shopping for a new policy. That’s where an independent agent come in. An independent agent will know the underwriting guidelines of the companies, and can then shop among the companies that will allow for the condition or reason that created the cancellation or non-renewal.
EMERGE INSURANCE AGENCY
The dwelling portion of home insurance covers your home and attached structures, such as a garage.
Home insurance will cover you if you need to file a claim for a "covered peril." Covered perils include:
Dwelling coverage isn't just for the physical structure. It also covers wiring, plumbing, and heating and cooling systems (what’s permanently attached to the home). In Florida many insurance companies cover swimming pool under “dwelling coverage” if the pool deck is connected to the home.
Other structures insurance covers structures on your property that aren't attached to your home. Other property includes a detached garage, a shed, or a fence.
Personal property coverage
Personal property coverage, also called contents coverage, covers the property within your home, including:
You can choose replacement value or actual cash value for your personal property. Here are the differences:
Let's say a burglar steals your five-year-old flat-screen TV. If you have replacement value coverage, your insurance company reimburses you the money to buy the same type of new TV. Actual cash value gives you what your five-year-old TV is worth after five years of use.
If you have expensive items, you may need a separate endorsement for valuables. You add an endorsement, also called a rider, to your insurance policy to protect valuable property. An endorsement can include jewelry, fine art, guns, and sports memorabilia.
When requesting a home insurance quote, ask whether you should add your expensive items under a separate endorsement.
Home or personal liability insurance coverage
Liability insurance covers you for visitor injuries on your property. Liability insurance covers not only a legal settlement but also your legal fees (up to your liability limit).
According to Donald Griffin, vice president of personal lines for the Property Casualty Insurers Association of America (PCIAA), many liability insurance policies will cover you even if an incident happens away from your home.
He recommends buying an excess liability or an umbrella policy that offers coverage of $1 million beyond your home insurance and car insurance policy coverage. These policies are relatively inexpensive, often costing $200 to $300 per year.
"You don't want to lose your home because you failed to buy an insurance policy," says Griffin.
Loss of use coverage
Loss of use coverage covers you if your home is damaged (from a covered peril) and you have to live somewhere else while it's repaired. Loss of use coverage includes paying for hotel rooms and meals while you're displaced.
If a fire damages your home, you can make a claim for loss of use coverage by submitting paperwork documenting your living expenses.
The loss of use standard for most homeowner insurance policies is a benefit worth 20 percent of your home's replacement value. When you get a home insurance quote, find out if the policy specifies any limitations or exclusions on loss of use.
EMERGE INSURANCE AGENCY - (904)677-5884
Cecil Williams -