You expect your homeowners insurance to have your back in the case of an emergency. After all, nobody expects to come home from a trip to find their home ransacked and their valuables missing—or to witness their possessions going up in smoke. The reason that you enrolled in a policy before moving into your home was to mitigate the consequences of the unforeseen.
It’s easy to get complacent when it comes to insurance. But what if you receive a notification that your provider will not be renewing your policy? When it comes to homeowners insurance, it’s important to stay vigilant so you don’t face any coverage gaps. This entails keeping a close eye on your policy, communicating with your agent and shopping around when your policy is about to end to ensure that you’re still getting the best coverage for your needs (at the best price). CoverHound can help with the latter, and shed some light on the former.
You’re probably wondering: are homeowners insurance policy cancellation and non-renewal different? Yes, they are.
According to the Insurance Information Institute, providers can only cancel a policy that’s been in effect for over two months if:
-You do not pay your premiums
-You commit fraud
-You seriously misrepresent yourself or living situation on the application
Furthermore, your provider must notify you a certain number of days before cancellation—this notification period varies by state.
Another situation that can lead to mid-term policy cancellation is failing to update your home in a way that’s agreeable to the insurance company. For instance, let’s say a home inspection reveals old wiring. As a condition of your insurance agreement, you say you will update the wiring. If your insurance company finds out that you did not follow through, they may cancel your policy. This could affect your ability to close on a home, or leave you vulnerable due to a lapse in coverage.
The moral of the story? Be truthful. When you enroll in a homeowners’ insurance policy, you provide a host of information about your living situation. Keep your agent updated, avoid misrepresenting your home on an application and make your payments on time. You can sometimes appeal a cancellation decision, but it will cost you time and money.
Policy non-renewal, on the other hand, generally occurs at the end of your insurance term. You have a choice whether or not to renew your insurance policy; so does your insurer. Why might this happen? Large claims or repeated claims (like water damage) may lead your insurer to determine that your home is no longer a worthwhile investment to protect.
Just look at the case of Nancy Wergeles, a Connecticut homeowner who found out her provider would not be renewing her personal property policy for the first time in years. The reason? She’d submitted (and received a $19,000 payout) for an engagement ring months before, reports the New York Times. Sometimes submitting large or frequent claims bumps homeowners into a “high risk” category.
The good news about non-renewal is that it doesn’t automatically mean higher rates when you enroll in a new policy elsewhere. Cancellation, on the other hand, usually does.
Want to explore your homeowners insurance options quickly and conveniently? Visit CoverHound for your quote today!