Are you in a situation where your home insurance has been dropped by your current carrier? This is a common situation, and understanding your rights as a customer will help you to avoid it.
Dropped homeowners insurance, also known as nonrenewal or cancellation of coverage, can be a stressful situation. You may feel like you're in a bind, but there are ways to make it easier. You can get your homeowners insurance in order by following these four simple steps.
Your rights as a Policyholder
You have a right to receive an official written notice 30 days in advance of the cancellation or non renewal of your insurance policy. This allows you to search for a different insurer, and prevent paying for coverage gaps.
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 the complaint and decide whether they wish to take further actions.
Your insurance cancellation rights
Insurance companies can cancel homeowner policies after 60 days if the customer has not paid their premiums, or committed fraud. A policy can be cancelled if an insurer determines that the customer's home poses a risk unacceptable, for example if there has been a fire or theft.
The condition of the home can also be a reason to cancel 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.
Before purchasing homeowners insurance, it's a good idea also to check your score. Low credit scores can make it difficult to obtain a mortgage and may also be viewed as a greater risk by insurance companies.
If you fail to pay your premiums for too long, then you can have your home insurance cancelled. Insurance companies will often allow you to make up missed payments during a grace period.
Another reason for dropping home insurance is a change in risk level, or the fact that your claim history has been extensive. Your home's risk rating can be changed if you have made many claims or if your house has been dangerously neglected.
Your rights as a 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. Talk to a financial advisor about finding the right coverage for your needs and budget.
Many online brokers will help you compare prices and options, even if your agent is not available. As they specialize in many home insurance companies, they can give you an idea of which are the best options for your profile.