Types of Insurance / Homeowners Insurance / Cancellations and Nonrenewal

What to Do When Your Home Insurance Company Drops You

Getting dropped by your insurance doesn’t mean you’re out of options. Read your notice and use a few simple steps to fix the problem, or start your search for new coverage right away.

You just received a nonrenewal or cancellation notice in the mail – what do you do now? Depending on the reasons behind your cancellation, you could have a variety of options before your homeowner’s insurance policy expires. The first thing you might ask yourself is, can an insurance company cancel your policy? Yes, insurance companies can cancel your policy at any time if you’ve stopped paying your bills or they suspect fraud. They can also choose not to renew your policy if you file too many claims or they’re no longer interested in doing business in your state, as some homeowners in California and Florida have learned.

Why is your homeowners insurance company dropping you?

The most important thing to do when you learn your insurance is dropping you is to figure out why. This requires understanding if you’ve received a cancellation or nonrenewal.

Reasons an insurance company can cancel your policy

Reasons an insurance company can non-renew your policy

Steps to follow when your insurance is dropping you

When you receive a nonrenewal or cancellation, the first thing to figure out is why you’ve received a notice and if it can be fixed. Insurance companies are required to provide an explanation, and some issues can be fixed before your policy expires.

Next, make sure you’ve been given enough time to find a new option or fix your problem. Insurance companies are required to provide advanced written notice, usually 10 days ahead of a cancellation and 30-60 days before a nonrenewal depending on your state's laws. If you have not received appropriate notice, your insurance company does not provide a reason for cancellation or nonrenewal even after contacting them, or you disagree with the reason for cancellation – contact your state’s insurance regulator!

If there is no way to fix your cancellation or nonrenewal, get started on these steps right away.

What is a FAIR plan and do need it?

Fair Access to Insurance Requirements (FAIR) Plans are insurance plans that are provided by states to make sure that individuals and businesses in that state can get coverage, even if private insurers won’t provide them with policies. These are sometimes called “insurers of last resort” because they are typically more expensive and cover fewer events. You may qualify for a FAIR plan if:

Every state offers some version of a FAIR plan, but 34 states and Washington, D.C. offer or will soon offer state-sponsored FAIR plans for their residents.

Do I need a FAIR Plan?

While you may qualify for a plan if your insurance has dropped you, it's not always your best option. If you're eligible for a standard homeowners insurance policy, this will almost always be less expensive and offer more protection. Some coverages, like protection for your personal property, might only be offered as add-ons and others, like loss of use or personal liability might be unavailable without purchasing an additional insurance policy. Only consider FAIR plans if you've shopped around, cannot find another policy, and have

Frequently Asked Questions

Is it hard to get homeowners insurance after being dropped?

This depends on why you've been dropped. If you've been canceled for fraud or because you haven't paid your premiums, you might have difficulty finding an insurance carrier to accept you. They might also charge more if they do accept you. If you've been nonrenewed for reasons outside of your control, such as your insurance company decided to leave your state, you could find that other companies are happy to insure your home.

How many claims can I file before a homeowners insurance company drops me?

This depends on your state's insurance rules and your homeowners insurance company. In Texas, for example, your insurance company can decide not to renew your policy if you file three of more non-weather related claims in three years or less - but they have to let you know you're in danger of nonrenewal after you file your second claim. Some companies might be fine with multiple claims, however, and just raise your rates.

Can an insurance company drop me without notice?

No. Insurance companies must provide written notice that they are dropping you, even for fraud or if you stop paying your bills. In most states, you're required to be given 10 days notice if your insurance policy is being canceled and 30-60 days notice if they are choosing not to renew your policy. In states like California and Florida, where insurance can be more difficult to find, you might have more protections. Florida requires insurers give you 120 days notice for a nonrenewal (90 days if you have a bundled home and auto policy), and California requires 75 days. If you haven't received your legally required advanced notice, make sure to contact your state's insurance regulator.

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