A couple of months before the end of your homeowners insurance policy term, your insurance company will inform you if your policy is up for renewal or if you’ve been nonrenewed. Your insurer may choose to not renew your policy for several reasons, like if you filed too many claims or they ’re pulling out of your state. But there are ways to find coverage after nonrenewal or cancelation by using an insurance marketplace like Policygenius or looking into your state’s Fair Access to Insurance Requirements (FAIR) Plan.
What is a home insurance nonrenewal notice?
Your insurance company will send you a nonrenewal notice anywhere from one month to three months before your policy’s expiration date. The required number of days notice varies by state. In New York, for example, insurers must give you 45 to 60 days notice and explain the reason for nonrenewal. In some states, an explanation for nonrenewal is not required.
Be sure to check with your state’s department of insurance to see what the rules are for nonrenewal. If you think your company’s nonrenewal decision was unfair or you want a more detailed explanation, contact the insurance company. If you’re still not satisfied, contact your state’s department of insurance to file a complaint.
6 reasons why your homeowners insurance was nonrenewed or canceled
When a home insurance company decides to not renew your policy, it has to send you a written nonrenewal notice explaining why. Here are some of the most common reasons why your home insurance policy may have been nonrenewed or canceled:
You filed too many claims
This is probably the most commonly cited reason for insurers to drop you from your policy at renewal. It could be that you filed too many claims within the designated three- or five-year window or you filed a claim that insurance companies generally don’t look highly upon, like a water damage, dog bite, theft, or fire claim.
Keep in mind that most states have consumer protections in place that dictate when a company is allowed to not renew your policy due to insurance claims. For example, certain states prohibit rate increases or nonrenewal for basic claim inquiries, zero-dollar claims (claims that didn’t result in a payout), and first-time claims. There are also states that prohibit companies from using weather or catastrophe claims as grounds for nonrenewal.
Your insurance company stopped offering coverage where you live
Your insurance company may have canceled your policy for the simple reason that they’re cutting down on a particular line of insurance or pulling out of a state or region. If cutting down on a particular line of business or pulling out of a high-risk state like California or Florida reduces losses and increases shareholder profits, they may decide to not renew your policy.
You were late on several premium payments
If your insurance company hasn’t already canceled your policy, paying your home insurance premium late is another reason why your policy might not be renewed for another year. If you’re struggling to pay your premiums, consider lowering your coverage limits or raising your deductible to lower your rates.
Your area experienced an increase in costly natural disasters
With wildfires, hurricanes, and tornadoes ravishing the country in recent years, many home insurance companies are reassessing their risk tolerance in high-risk states like California, Florida, Texas, Louisiana, and Colorado. If your area has seen an increase in any of these natural disasters over the last few years, this might be the reason why your home insurance policy wasn’t renewed.
You added high-risk items to your home
Many home insurance companies consider homes with a trampoline, pool, or dog with an “aggressive” breed to be too high risk to insure. This is because all three items put you at greater risk of filing a costly home insurance liability claim. If you added any of these to your home in the last year, this may be the reason why your insurer decided to nonrenew or cancel your policy.
Your credit score took a hit
Home insurance companies also consider your credit score in determining your risk of filing a claim. This is because it’s been reported that homeowners who have a history of credit issues are more likely to file a claim than homeowners with unblemished credit. So if your credit score decreased over the past year, your insurance company might have decided to not renew your policy to avoid the added risk.
What’s the difference between homeowners insurance nonrenewal vs. cancelation?
While homeowners insurance nonrenewal and cancelation both mean your home insurance policy is discontinued and you have to find new coverage elsewhere, there are different rules for each.
When your home insurance policy is nonrenewed, your policy expires at the end of your policy term. A company can choose to not renew your policy for a slew of reasons, from you filing too many claims to the insurer pulling out of your state.
On the other hand, an insurance company can choose to cancel your policy within a certain number of days of your policy’s start date for any reason. After that, there are very limited reasons why they can cancel your policy that vary by state. Among the most popular are not paying your premiums on time, misrepresenting yourself on your application, or if your home’s risk of damage becomes substantially higher.
How to get home insurance after nonrenewal or cancelation
Before you begin looking for a new insurance company, be sure to check with your state’s department of insurance to see if the company gave you enough of a heads up. Insurance companies in Florida, for example, must send a nonrenewal notice at least 100 days prior to the policy expiration date, and the notice must include a reason why.
Assuming they gave you enough of a heads up and the reasoning is legit, here are a couple of ways you can get covered after nonrenewal or cancelation:
Use an insurance marketplace
The best way to compare coverage and rates is to use an insurance marketplace like Policygenius. Many insurance marketplaces can provide quote comparisons on the spot, and applying often takes as little as 5 minutes. You'll be able to compare policies from top insurance companies, as well as insurers that specialize in high-risk homes and other surplus lines carriers.
Look into insurance companies for high-risk homes
Not all insurance companies have a low risk appetite — there are many companies willing to work with homeowners who’ve had a lapse in coverage or are at higher risk of filing a claim.
Here are three popular insurance companies you might want to check out if your home insurance policy was nonrenewed or canceled:
Your state’s FAIR Plan
If you’re having trouble finding coverage on the private company market, you may be able to get a form of last-resort coverage through your state’s Fair Access to Insurance Requirements (FAIR) Plan. A FAIR Plan is a high-risk insurance pool that is administered by your state’s department of insurance and funded by private companies that are registered with the state.
Most (but not all) states have FAIR Plans, and each has its own policyholder benchmarks for approval. Many states, for example, require policyholders to prove that they’ve been turned down by at least three insurance companies before they’ll be eligible for a FAIR Plan.
It’s also worth noting that FAIR Plans have strict limits on the maximum amount of policy coverage. Your home may only be covered up to a certain limit, and your home and personal property are typically only covered at their actual cash value. Additionally, FAIR Plans don’t normally include liability protection or additional coverage for expensive valuables.