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There is no shortage of reasons why you may be struggling to pay your homeowners insurance premiums. Maybe you were recently laid off by your employer due to the circumstances of the coronavirus, or maybe your policy cost went up after a claim. Whatever the reason, you may be wondering if you can pause your policy premiums.
In most cases, your insurance company won’t simply let you pause your premiums and continue insuring your home. But in extenuating circumstances, like during the COVID-19 pandemic, many insurance companies are extending grace periods beyond 30 days and not charging late fees. Some insurers are also offering flexible plans for policyholders facing financial hardship.
Be sure to talk to your insurance company if you’re having a hard time paying your premiums. If they accommodate you with a payment plan and you’re still having difficulty affording coverage, consider raising your policy deductible and other rate-saving measures. But whatever you do, don’t simply let your policy lapse — a lapse leaves your home without necessary protection, and having a policy cancellation on your record can make it difficult to get coverage going forward.
Insurance companies generally won’t let you pause your payments and maintain coverage on the home
If you’re struggling to make insurance payments, consider raising your deductible or switching insurers
Many insurance companies are offering extended grace periods and payment options due to COVID-19
Your insurance company typically won’t let you pause your homeowners insurance payments while maintaining coverage on the home. If you miss a premium payment, your insurance company will give you 30 days to pay the balance, otherwise your policy will lapse.
Homeowners insurance isn’t required by law, but it is required by most mortgage lenders and if you stop paying your premiums, they will likely purchase insurance on your behalf (and charge you for it). This is all to say that if you have a mortgage on the home, you’re going to be paying for insurance either way, even if you let your policy lapse.
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If you’re struggling to pay premiums and you’re confident that you won’t be filing a claim anytime soon, raise your deductible to its highest possible limit until you’re financially above water to lower it back to a reasonable amount. Raising your deductible lowers your insurance premium, but increases the amount you’re responsible for paying in the event of a claim.
If the deductible option isn’t cutting it, consider re-shopping your homeowners insurance. Switching insurance companies is the most cost-effective way to save on coverage, and you may even end up with a better policy.
If you can’t pay your premiums because your source of income was impacted by the coronavirus pandemic, your insurance company may give you more time to pay a missed policy premium or work with you to implement a payment plan as you maneuver your way out of financial hardship. However, since you still use your home as frequently (if not more) than you did before COVID-19 and claims remain as common as ever, insurers won’t let you suspend your coverage like some did for auto insurance policyholders.
While insurers aren’t letting you pause your homeowners insurance, many insurers are helping affected customers in other ways. Here’s a few ways that our partnering companies, like AIG, Travelers, SageSure, and Plymouth Rock, are providing relief for customers with financial hardship:
If your policy lapses and you're unable to make a payment because of the coronavirus implications, companies will work with you to reinstate the policy, create a payment plan and waive the reinstatement fee
Temporary pausing of exterior and interior home inspections
If a home requires repairs for the policy to remain active and the policyholder is having a difficult time meeting the inspection deadline because of the coronavirus fallout, your company may give you more time to make home improvements
Much of the insurance company workforce (agents, claim reps, claim adjusters) may work remotely depending on location
Policyholders shouldn’t expect any disruption in policy service
Call centers — including guidance on existing and potential losses and claims — will remain fully operational
Your homeowners insurance deductible is the out-of-pocket amount you’re responsible for paying before your insurance kicks in. If you raise your deductible, it will lower your insurance premiums.