Home insurance renewal checklist: three easy steps

About 30–40 days prior to the end of your homeowners insurance policy term — the period of time that your coverage is in force — the insurance company will inform you that your policy is up for renewal. Policy renewal is when the insurance company gives you the option to sign up for a new policy term, similar to how landlords will reach out to tenants to renew their lease a couple months out from the end of the leasing term.

But policy renewal involves far more than simply signing a form and sending your insurer a check — it’s an important opportunity to review policy changes and update your coverages. Your home insurance renewal checklist should consist of the following:

• Check for changes to your homeowners insurance rates
• Check for changes to your coverage or deductible
• Update your policy coverage to reflect home renovations, additional inventory, and lifestyle changes like additional members of the residence or a kid moving off to college

Keep in mind that the insurance company may also inform you that your policy isn’t being renewed — referred to as nonrenewal. As the co-signer of your insurance policy, your mortgage company will also be informed of your nonrenewal. If you’re not able to find a replacement policy and your coverage lapses, your mortgage company may place “lender-placed” insurance on your home — a type of coverage that is both expensive and limited.

1. Check to see if your rates changed

Check for any changes to your homeowners insurance premiums. Your insurance company will likely inform you if your rates for the next term are higher or lower than your current rates. If you notice your insurance premiums are going up and you’re not sure of the reason, reach out to your insurance agent. A few reasons your rates may have gone up include:

• Your coverage went up. Your rates are largely determined by the coverage amounts in your policy. Since your dwelling coverage amount is based on the rebuild value of your home — and rebuild costs generally go up from year to year — there’s a chance your rates increased because your dwelling limit went up.

• Your home is older or due for upgrades. Older homes typically cost more to rebuild than newer homes and are more risky to insure as they become more fragile or are due for upgrades as they age.

• Your credit score went down. If your credit score went from great to poor in the matter of a year, that could be another reason why your rates went up. Homeowners with low credit scores are considered high risk, as insurance companies have found that property owners with poor credit are more likely to make frequent claims.

• You filed a claim. If you recently filed a claim or have a long claims history, that could be another reason why your rates went up at renewal. Keep in mind that your insurer doesn’t have to wait until renewal to increase your premiums due to a claim.

• Your home is exposed to more risks. If your community recently experienced a hurricane, tornado or wildfire, that could be another reason why your insurance premiums went up.

If your homeowners insurance premiums went up anywhere from 9–10%, it’s generally suggested that you reshop your policy.

2. Look for any changes to your coverage

Be sure to check for any changes to your coverage. Your insurance company may have — at no additional cost — added coverage to your policy that you should know about. It could have also added an exclusion to your policy — like a wildfire exclusion or roof-damage exclusion if your roof is beyond the age-threshold for coverage.

As we touched on earlier, it’s also possible that the insurer increased your coverage if build rates went up or the property got older. Since your other structures, personal property, and loss-of-use coverages are set as a percentage of your dwelling coverage, coverage limits for those components may have gone up as well.

Lastly, your insurance company may also increase your policy deductible at renewal or inform you of a separate deductible requirement for risks like hurricanes and hail. If your insurer increased your deductible, it’s likely that it now requires higher deductibles for every home in your region — not simply yours.

3. Update your policy to account for home, inventory, or lifestyle changes

At renewal, your insurance company will include a form where you indicate if you’ve made improvements or upgrades to your home, had any major purchases like jewelry or computers, or experienced any lifestyle changes like additional members of the residence or a new home business.

If you recently bought an engagement ring, for example, your insurer will likely suggest that you itemize it with a scheduled personal property endorsement to ensure it’s fully covered. If you installed a new roof or added a security system to your home, you’d indicate that as well and could potentially get a hefty discount on your premiums.

What to do if your home insurance is nonrenewed

It’s also possible that your insurance company sends you and your mortgage lender a nonrenewal notice, meaning they’re declining to renew your policy. Common reasons for nonrenewal are if you live in a region that’s now prone to natural disasters, you own a dog breed that’s deemed dangerous, your credit score went down, or your home is simply in poor shape.

If you were recently nonrenewed, be sure to do the following:

Know your rights

State insurance departments have regulations in place to keep insurance companies in check. These regulations stipulate when insurers can and cannot cancel policies or increase insurance premiums and they also have rules for nonrenewal.

In New York, for example, an insurance company must give you 45–60 days notice from when you’re informed of nonrenewal until the end of your policy term. Insurers are also required to provide a reason for nonrenewal.

If you think the reason for nonrenewal is unfair, you can file a complaint with your state’s insurance department or an associated department.

Talk to your mortgage company

Since your mortgage company is listed as an “interested party” on the policy, they will likely also be sent a notice of nonrenewal by your insurance company. If you’re appealing the nonrenewal decision, be sure to inform your mortgage company as soon as possible. If you’re looking for new coverage, inform your lender that you’re actively pursuing a replacement policy.

Shop around

If you were recently nonrenewed, worry not, you have an entire month and a half at least to find a replacement policy. Be sure to utilize services like Policygenius that work with multiple companies — some that even specialize in high-risk properties — to find a policy that works for you and your home.

If you’re not able to find homeowners insurance on the private market, look into a Fair Access to Insurance Requirements, or FAIR Plan, which provides last-resort coverage for high-risk properties that have been turned down by three or more insurance companies.